Michael Kors parent Q3 beats Street; Versace to open nearly 100 stores

Capri Holdings posted a strong third quarter, with double-digit growth across all three of its brands.

The parent company of luxury banners Michael Kors, Jimmy Choo and Versace reported that its net revenues rose 24% to $1.6 billion for the quarter ended Dec. 25. By brand, sales rose 20% to $1.2 billion at Michael Kors and 29% to $251 million at Versace. Sales increased 47% to $178 million at Jimmy Choo.

In an investor presentation, Capri said it plans to expand Versace’s global footprint to 300 stores, up from 212 as of December.  The company is also renovating existing Versace stores.  

“Unfortunately, there was very little investment put into these stores over the last 10 to 15 years,” Capri chairman and CEO John Idol said during the company’s earnings call. “And so we've renovated approximately 50% of the fleet. We hope to get the balance of that done in the next 24 months. And again, if any of you have seen the new stores, they are quite stunning. And we are seeing increased productivity in these stores quite significant.

Capri’s net income increased to $322 million, or $2.11 a share, from $179 million, or $1.18, a year earlier. Adjusted earnings of $2.22 a share easily topped analysts’ estimates of $1.69.

“We are pleased to report third quarter performance exceeded our expectations for revenue, operating margin and earnings per share,” stated Idol. “We are especially proud of our performance given the ongoing headwinds caused by the pandemic, including regional restrictions and supply chain challenges.”

As previously reported, Idol is set to turn over the reins of the company to Joshua Schulman, CEO of Michael Kors, in September.

Capri now expects full-year revenue of around $5.56 billion versus an earlier estimate of $5.4 billion. It expects adjusted earnings per share of around $6.00, up from $5.30 per share. Looking further ahead, it expects revenue of about $6.1 billion for fiscal 2023.

"We are raising fiscal 2022 revenue and earnings guidance based on the strength across all our luxury houses,” Idol said. “Looking to fiscal 2023, we expect to generate double-digit revenue and earnings growth. This outlook reflects the success of our ongoing strategic initiatives as well as a continued recovery from the global pandemic.”