Revenues Slide 66.5 Percent at Capri, Loss Totals $180 Million
The effects of the coronavirus pandemic continue to play out at Capri Holdings Ltd.
The fashion house — parent company to the Michael Kors, Versace and Jimmy Choo brands — lost another $180 million during the most recent quarter as a result of the global health crisis and subsequent shutdowns. That’s on top of the $551 million loss the company reported last quarter.
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“The COVID-19 pandemic continues to profoundly impact the entire world,” John D. Idol, Capri’s chairman and chief executive officer, said in a statement. “Looking at our progress in the fiscal first quarter, we were encouraged by trends across all three of our luxury houses, with sales and margin performance ahead of our initial expectations. We were particularly pleased with the strong growth of our e-commerce business, as well the sequential improvement in overall revenue trends through the first quarter and into July.
“During these unprecedented times, we plan to continue to execute on our strategic growth initiatives and remain confident in the long-term opportunities for each of our unique global luxury houses,” Idol continued. “Capri Holdings has a portfolio of three iconic, founder-led fashion luxury brands that have enduring value and a long history of successfully navigating challenging periods. We will continue to carefully guide our business through the current retail environment, while positioning the company to resume its growth trajectory in fiscal 2022.”
For the three-month period ending June 27, Capri’s total revenues were $451 million, down from $1.3 billion the same time last year, while the company lost $180 million, compared with net profits of $45 million last year.
Still, the 66.5 percent drop in total revenues was slightly better than expected, causing the stock to shoot up more than 7 percent during pre-market hours Wednesday. In early July, the retailer anticipated top-line sales would fall by 70 percent during the most recent quarter.
By brand, Versace’s revenues were $93 million, compared with $207 million the same time last year, while the company widened its operating loss to $41 million, up from $3 million last year. Jimmy Choo’s revenues were $51 million, compared with $158 million a year ago, with an operating loss of $29 million, compared with profits of $11 million a year ago. And Michael Kors’ revenues were $307 million, down from $981 million last year. The Kors’ brand lost $48 million, compared with profits of $201 million last year.
The fashion house ended the quarter with about $1.1 billion in liquidity.
Like many companies, Capri was forced to temporarily shut all of its stores outside of Asia in mid-March. The company did not begin reopening stores until late May.
Capri ended the quarter with 1,254 stores, compared with 1.264 the same time last year, or 204 Versace stores, 228 Jimmy Choo stores and 822 Michael Kors units. In July, executives said the company plans to continue opening Versace and Jimmy Choo stores, ramping up the total number of stores in each brand to around 300, while closing unprofitable Michael Kors locations.
Capri’s stock, which closed down 0.21 percent Tuesday to $13.98 a share, is down about 56 percent year-over-year.
