Scott Olson/Getty Images News
Capri Holdings Limited (NYSE:CPRI) fell in postmarket trading after missing consensus estimates with its FQ3 earnings report.
Total revenue fell 5.6% year-over-year to $1.43B. On a constant currency basis, total revenue was down 6.6%. Total company retail sales declined in the mid-single-digits with trends being impacted by softening luxury consumer demand primarily in the Americas as well as by the Michael Kors Americas Ecommerce implementation issues discussed last quarter. In wholesale, revenue decreased in the low-teens driven by softer demand in the Americas and EMEA.
Versace revenue was down 8.8% during the quarter to $227M compared to a year ago and was 10.8% lower on a constant currency basis. Versace operating income was $14M and the operating margin was -6.2%.
Jimmy Choo revenue fell 1.2$ to $166M compared to the prior year. On a constant currency basis, total revenue increased 3.0%, driven primarily by softening consumer demand, mainly in the Americas, partially offset by increased revenue in Asia. Jimmy Choo operating income was $4M and operating margin was 2.4%
Michael Kors revenue fell 5.6% to $1.03B and was down 6.2% on a constant currency basis. Michael Kors operating income was $219M and operating margin was 21.2%.
CPRI’s overall adjusted gross profit was $928M and adjusted gross margin was 65.0% vs. 66.3% a year ago. The margin decline was primarily driven by lower full price sell throughs.
The company’s net inventory as of December 30 was down 14% Y/Y to $1.02B.
CEO update: “Overall, our performance in the third quarter continued to be impacted by softening demand for fashion luxury goods. However, sales trends improved sequentially in the third quarter, driven by better results in our own retail channel while sales in our wholesale channel remained challenged. Additionally, we were pleased to have resolved the Michael Kors Americas Ecommerce implementation issues discussed last quarter and our platform is now running smoothly.”
Due to the pending merger transaction of Capri Holdings (CPRI) and Tapestry (TPR), the company does not intend to provide financial guidance.
Shares of Capri (CPRI) moved 2.19% lower in postmarket action on Thursday after gaining 2.86% during the regular session.
