LONDON – Capri Holdings Limited (NYSE:), home to luxury fashion brands such as Versace, Jimmy Choo and Michael Kors, reported a decline in sales for the fourth quarter of fiscal 2024.
The company saw its revenue fall 8.4% to $1.223 billion, a significant decline from the $1.335 billion reported in the same quarter of the previous year. This decline also fell short of analysts’ consensus estimate of $1.29 billion.
Adjusted earnings per share (EPS) for the quarter was $0.42, below analyst estimates of $0.67. The company’s adjusted operating margin also saw a decline, coming in at 6.4% compared to 9.1% last year.
John D. Idol, Chairman and Chief Executive Officer of Capri Holdings, expressed disappointment with the fourth quarter performance and attributed the decline to a global decline in demand for luxury fashion items. Despite the revenue decline, Idol highlighted the addition of 11.6 million new consumers to the company’s databases, representing 14% growth over last year. He highlighted the strong brand equity and enduring value of the company’s luxury homes.
The financial results painted a bleak picture of the company’s performance, with net loss widening to $472 million, or -$4.03 per diluted share, impacted by non-cash impairment charges. This is in stark contrast to the net loss of $34 million, or -$0.28 per diluted share, last year. Gross profit margin decreased, primarily due to lower full-price sell-through.
In terms of individual brand performance, Versace sales fell 3.6% on a reported basis and 2.9% on a constant currency basis. Jimmy Choo’s sales fell 9.3%, and Michael Kors saw a decline of 9.7% on a reported basis and a decline of 9.2% on a constant currency basis.
Looking ahead, Capri Holdings has not provided financial guidance due to its upcoming merger transaction with Tapestry (NYSE:), Inc. However, the company expects free cash flow to normalize in fiscal 2025. Idol concluded with comments on the proposed acquisition by Tapestry, which is currently facing a legal challenge from the FTC. He reiterated that the company disagrees with the FTC’s decision and that it believes in the benefits of the merger for shareholders and employees.
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