Capri Q2 sales hit by high single-digit declines across all brands, earnings slashed

Capri Holdings on Thursday announced revenue decreased 8.6% to $1.29 billion for the second quarter, on the back of high single-digit sales declines across its Versace, Jimmy Choo, and Michael Kors brands, respectively.

The New York-based luxury company said total retail sales declined in the high-single-digits for the quarter, with trends being impacted by softening consumer demand primarily in the Americas. In wholesale, revenue decreased low-double-digits on softer demand in the Americas, added the U.S. fashion conglomerate.

By brand, Versace revenue fell 9.1% to $280 million, while Jimmy Choo revenue dipped 7% to $132 million. Likewise, Michael Kors revenues decreased 8.6% to $879 million, hindered by the delayed implementation of the brand’s Americas e-commerce site.

For the the three months ending September 30, Capri net income was slashed to $90 million, compared to $224 in the prior-year period.

“Capri Holdings’ second quarter results were below our expectations due to macro-economic headwinds as well as Ecommerce implementation related challenges. In early July, we implemented a new e-commerce platform for Michael Kors in the Americas. While we are excited about the long-term benefits, the transition negatively impacted our second quarter results. Additionally, during the quarter consumer demand for fashion luxury goods softened primarily in the Americas,” ​John D. Idol, the Company’s Chairman and Chief Executive Officer, said,

“Despite near-term challenges, we remain focused on executing our strategic initiatives to drive long term sustainable growth at all three of our luxury houses. Versace, Jimmy Choo and Michael Kors continued to resonate with consumers as evidenced by the 11.4 million new consumers added across our databases, representing 15% growth over the last year. This reflects the strong brand equity and enduring value of our three iconic houses.”

The earnings update comes ahead of Capri’s previously announced merger with rival U.S. fashion conglomerate Tapestry Inc, who also reported its financial performance for the July-September quarter on Thursday. The owner of Coach said net sales were flat at $1.51 billion in the quarter ended Sept. 30 from last year.