Capri Holdings Ltd, the parent company of luxury fashion brands Versace, Michael Kors, and Jimmy Choo, has raised its profit forecast for the full year due to a resurgent demand for high-end fashion among higher-income consumers. Despite the ongoing issue of high inflation in the United States, luxury goods makers have been able to continue raising prices without facing pushback from shoppers.
John Idol, the CEO of Capri, stated that the desire for luxury and glamour is back among consumers, leading to plans for further price increases across the company’s brands in the fall. This trend is not limited to Capri; other companies in the luxury fashion industry, such as Ralph Lauren and Nordstrom, have also reported strong demand. In contrast, retailers like Walmart and Target have lowered their forecasts due to lower consumer spending power caused by inflation.
Capri’s brands have experienced significant growth in sales. Michael Kors saw a 21.8% increase, reaching $1.02 billion in the fourth quarter. Jimmy Choo’s revenue also rose, increasing by 25.8%, while Versace saw a significant jump of 34% in revenue.
For fiscal year 2023, Capri now expects a profit of approximately $6.85 per share, up from the previous estimate of $6.60 per share. However, the company has lowered its revenue forecast for 2023 to $5.95 billion from the initial estimate of $6.1 billion. This adjustment is due to factors such as a stronger dollar and COVID-19 lockdowns in China.
In its most recent quarter, Capri reported a total revenue of $1.49 billion, a 24.6% increase compared to the same period last year. The company exceeded analysts’ estimates, with adjusted earnings of $1.02 per share, surpassing the expected 82 cents per share.
Despite challenges posed by inflation and global uncertainties, Capri Holdings Ltd remains optimistic about the future. The company’s positive profit forecast and share buyback program indicate confidence in its ability to meet the growing demand for luxury fashion from high-income consumers.
Useful links:
1. Versace Official Website
2. Michael Kors Official Website
