Several investors expressed concern as Capri Holdings CEO John Idol made an announcement on Tuesday about the detrimental effects of the persistent COVID-19 lockdowns on sales.
In the first quarter of this year, Capri Holdings, which owns Michael Kors, Jimmy Choo, and Versace, reported that revenues had risen by 8.5 percent to USD 1.36 billion. In spite of this, the company’s profits fell to USD 201 million, down from USD 219 million the previous year. The company’s shares fell 4.7 percent on Tuesday despite beating expectations in the first quarter of 2023.
Among all the brands in the first quarter, Jimmy Choo led the pack with a revenue increase of 21.1 percent over last year to USD 172 million. In Q1, Versace’s revenues increased by 14.6 percent to USD 275 million, and Michael Kors’ revenues grew by 4.8 percent to USD 913 million. Across all brands there was a significant decline in revenue in the Asia region.
Capri Holding’s growth continues to be driven by footwear and accessories. Idol announced in the company’s earnings conference call that sales in Weddings and Travel continue to soar due to the return to work. He also cited that retail sales increased by double digits.
Women’s footwear sales in Versace’s retail channel increased about 50 percent in Q1. In terms of performance, Idol said dress styles accounted for approximately 75 percent of the increase as consumers responded positively to styles featuring a range of Versace codes, including Greca and Medusa.
According to the CEO, Jimmy Choo’s JC logo jacquard slides have become a summer wardrobe staple. Similarly, Jimmy Choo’s Rome trainer saw a strong response from both women and men. The Crystal “C” collection and pearl-embellished styles were also highlights of the collection.
Idol reported that consumers “reacted positively” to Michael Kors’ “elevated execution” of seasonal flats and sandals this quarter. Moreover, the brand’s hardware and studding performed exceptionally well.
In recent weeks, Idol has laid out plans for the future of the company’s three brands at an Investor Day held in New York. After taking over Michael Kors in 2003, Idol built the designer brand into a major company. Once the company was renamed as Capri Holdings, he acquired Jimmy Choo in 2017 and Versace in 2018.
Michael Kors’ revenues are projected to increase by just over USD 1 billion to USD 5 billion over the long run, while Versace is expected to add USD 900 million to USD 2 billion and Jimmy Choo to add USD 387 million to USD 1 billion.
By 2023, Versace is expected to generate USD 1.175 billion in revenues, while Jimmy Choo will generate USD 650 million. For Michael Kors, Capri expects revenues of approximately USD 4.025 billion. In total, Capri Holdings expects total revenue of approximately USD 5.85 billion for fiscal 2023.