Capri Holdings, the company behind luxury brands Michael Kors, Versace, and Jimmy Choo, has experienced a decline in sales for the third quarter. Revenues dropped by 5.6% to $1.43 billion, with the retail segment being particularly affected by weak demand for luxury goods, especially in the Americas. The decrease in sales can also be attributed to the challenges faced by the implementation of Michael Kors Americas e-commerce.
When observing sales by brand, Versace saw a decrease of 8.8% to $227 million, with the Americas and Europe, Middle East, and Africa regions dragging down a 10% increase in Asia. Jimmy Choo’s revenue also fell by 1.3% to $166 million, with flat sales in Europe, Middle East, and Africa, and a 9% increase in Asia offset by an 11% decline in the Americas. Lastly, Michael Kors brand sales dropped by 5.6% to $1.03 billion, with declines seen in all markets.
The net income for the third quarter was $105 million, or $0.88 per diluted share, compared to $225 million, or $1.72 per diluted share, in the previous year. John D. Idol, the chairman and CEO of Capri Holdings, acknowledged that the company’s performance was impacted by a softening demand for luxury goods. However, he also highlighted a sequential improvement in sales trends in the third quarter, particularly in their own retail channel.
Capri Holdings has successfully resolved the issues with the Michael Kors Americas e-commerce implementation. Idol mentioned that the brands of the company continue to resonate with consumers. Additionally, Capri Holdings has added 10.7 million new consumers to their databases, representing a 13% growth compared to the previous year. This milestone has brought their customer database to over 90 million, reflecting the strong brand equity and enduring value of their three iconic houses.
The earnings update comes ahead of Capri’s planned merger with U.S. fashion conglomerate Tapestry Inc, which has also reported its financial performance for the September-December quarter. Tapestry, the owner of the Coach brand, saw its net sales rise to $2.08 billion in the quarter ended December 31.
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