Capri Holdings, the parent company of luxury fashion brands Michael Kors and Versace, has surpassed revenue expectations and revised its annual forecasts for the second time. This positive outlook is fueled by the optimism in the luxury goods industry, which anticipates increased spending on high-end fashion as social events and parties resume and vaccination efforts continue to progress rapidly. Michael Kors, in particular, has experienced a significant recovery, with its revenue nearly tripling compared to the lows observed during the pandemic.
Despite the challenges posed by the ongoing global pandemic, Chief Executive John Idol expressed confidence in Capri Holdings’ ability to navigate these uncertainties successfully. Additionally, Capri’s European counterparts, LVMH and Kering, have also reported a rebound in sales. LVMH achieved record profitability and revenue across its brands like Fendi, Loewe, and Celine, while Kering witnessed a strong resurgence of Yves Saint Laurent in all regions.
In light of its strong performance, Capri has increased its annual revenue forecast to approximately $5.3 billion, up from the previously projected $5.15 billion. However, the company remains cautious about the potential impact of the Delta variant of COVID-19, which could hinder the pace of recovery, particularly in Europe. Moreover, Capri’s forecast does not account for any future store closures, extended shutdowns, or government-imposed restrictions that may affect sales.
In terms of profitability, Capri anticipates an annual adjusted profit of around $4.50 per share, surpassing the earlier projected range of $3.80 to $3.90 per share. Overall, the company’s first-quarter revenue nearly tripled to $1.25 billion compared to the same period last year when numerous stores were closed. Excluding certain items, Capri’s earnings per share exceeded expectations, reaching $1.42.
Capri Holdings’ strong performance underscores the growing confidence in the luxury goods market as consumers return to retail and prioritize high-end fashion. The company’s ability to adapt to evolving circumstances and meet customer demands positions it well for sustained growth and recovery in the post-pandemic era.
Useful links:
1. Capri Holdings Official Website
2. LVMH Official Website
