The US fashion group Capri Holdings Limited failed to meet market expectations in the third quarter of the 2022/23 financial year. The parent company of the brands Michael Kors, Versace and Jimmy Choo then lowered its annual forecasts on Wednesday. The disappointing news immediately caused the company’s share price to plummet by more than 20 percent.
For the three months ended December 31, consolidated revenue was $1.51 billion, down 6.0 percent from the prior-year quarter. Adjusted for exchange rate changes, revenues fell by 0.5 percent.
The main brand Michael Kors had to accept a drop in sales of 7.2 percent (currency-adjusted -3.6 percent) to 1.09 billion US dollars, the Jimmy Choo label dropped by 5.6 percent (currency-adjusted +3.4 percent). to $168 million. The fashion house Versace developed comparatively solidly. Its revenue was $249 million, down just 0.8 percent year-on-year. Adjusted for currency effects, Versace even achieved an increase of 11.2 percent.
In addition to the decline in sales, higher operating costs weighed on the result. Operating profit fell by 29 percent to 236 million US dollars. Quarterly net income attributable to shareholders shrank 30 percent to $225 million.
CEO John Idol admitted in a statement that the third quarter was “more difficult than expected”. Above all, the global wholesale business has recently been “disappointing” and burdened the operating margin.
In view of the weak development, the group lowered its forecast for the full year. It now only expects sales of about $5.56 billion, down from a previously expected $5.70 billion. Diluted earnings per share target was downgraded to $6.10 from $6.85.