Michael Kors, Versace owner Capri says revenue fell almost 10% in Q1

Capri Holdings, the parent company of major brands Versace, Jimmy Choo, and Michael Kors, has reported total revenue of $1.23 billion in the first quarter of fiscal 2024, a 9.6% fall year on year. In constant currency, total revenue decreased by 9.3%. The company didn’t explain the fall but said the figures were slightly ahead of expectations.

Gross profit was $812 million, with a gross margin of 66.1%, slightly down from $901 million and 66.3% in the prior year. Adjusted figures show a gross profit of $812 million and a gross margin of 66.1%, compared to $900 million and 66.2% in the prior year, Capri said.

The company’s operating income also saw a significant drop in Q1 FY24, landing at $80 million and an operating margin of 6.5%, compared to the $231 million and 17% reported in the previous year. Adjusted income from operations stood at $111 million, with an operating margin of 9%, compared to $251 million and 18.5% in the previous year.

Net income for Q1 FY24 was $48 million, or $0.41 per diluted share, down substantially from the prior year’s $201 million, or $1.40 per diluted share. And adjusted net income was $88 million or $0.74 per diluted share, compared to $215 million or $1.50 per diluted share in the prior year.

Among its brands, Versace reported a 5.8% decrease in revenue at $259 million on both a reported and constant currency basis. Operating income was $3 million with a significantly lower operating margin of 1.2%, compared to $52 million and 18.9% in the prior year.

Jimmy Choo, on the other hand, saw a revenue rise of 6.4%, or 7% on a constant currency basis, totalling $183 million. Its operating income was $16 million with an operating margin of 8.7%, slightly down from $19 million and 11% in the prior year.

Michael Kors faced the most challenges, with revenue falling by 13.8% to $787 million. On a constant currency basis, total revenue dropped by 13.4%. Operating income was $130 million, and the operating margin was 16.5%, a decline from $222 million and 24.3% in the prior year, the release added.

“As announced earlier, the planned acquisition of Capri Holdings by Tapestry marks a major milestone for our company,” said John D Idol, Capri Holdings’ chairman and CEO. “It is a testament to all that our teams have achieved in building Versace, Jimmy Choo and Michael Kors into the iconic and powerful luxury fashion houses they are today. We are confident this combination will deliver immediate value to our shareholders. It will also provide new opportunities for our dedicated employees around the world as Capri Holdings becomes part of a larger and more diversified company. By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands.”