Capri Holdings Ltd surpassed sales projections for the quarter, reporting a smaller-than-expected loss due to a boost in online shopping and strong demand in China for its Versace and Jimmy Choo brands. The company, which also owns the iconic Michael Kors label, experienced a 14% increase in its shares during early trading.
Sales for Versace and Jimmy Choo in Mainland China remained steady compared to the previous year, indicating a promising recovery for the region post-Covid-19. However, revenue from Hong Kong and Macau markets continued to lag behind. The rise in domestic demand within China, fueled by travel restrictions, has been a significant driving force in the luxury goods sector.
While there are positive signs in China, Capri Holdings Ltd has warned that Europe and North America may see a slower recovery in sales. The company anticipates a 40% decline in revenue for the second quarter and a 35% decrease for the entire year. CEO John Idol highlighted the impact of reduced tourism on sales volumes in popular European cities like London, Paris, and Milan.
Despite a substantial 66.5% decline in total revenue to $451 million in the first quarter, Capri Holdings Ltd experienced a 30% increase in online sales, helping to offset the overall drop. The company reported a loss of $1.04 per share, outperforming analysts’ expectations of a loss of $1.11 per share.
Looking forward, Capri Holdings Ltd remains confident in its outlook for fiscal 2022, expecting a return to earnings and revenue growth. This positive outlook amidst industry challenges demonstrates the resilience of the company in tackling the uncertainties of the global luxury goods market.
For more information on Capri Holdings Ltd and its brands, visit their official website here. Additionally, for insights on the luxury goods industry, explore this article here.
