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Capri announces fourth quarter and full year fiscal 2020 financial results

Jimmy Choo

Capri Holdings Limited, a global fashion luxury group, announced 11.3% decline in fourth quarter revenue and 6% growth in the revenue of its full year fiscal 2020, ended 28th March, 2020.

SEE ALSO : Capri to reopen global stores

John D. Idol, the company’s Chairman and Chief Executive Officer, said, “Looking at fiscal 2020, we were pleased with the progress of our strategic initiatives across the company. Prior to the impact of COVID-19, our earnings per share outlook was largely on track with our expectations. While we expect fiscal 2021 to be significantly impacted by the effects of the virus, we are encouraged as we reopen our stores globally with initial revenue exceeding our expectations. Capri Holdings has a portfolio of three iconic, founder-led fashion luxury houses that inspire passion and excitement in customers who value design innovation and exceptional quality. Looking ahead, we plan to continue to execute on our growth initiatives. We remain confident in the long-term opportunities for each of our unique luxury brands and believe Capri Holdings is poised to resume its growth trajectory in fiscal 2022.”

The company has begun to resume store operations globally in accordance with local government’s reopening guidelines while following the health and safety protocols of local authorities and public health organizations.

Currently, approximately 90% of the company’s global retail fleet of stores are open. Revenue performance has ranged from 50% to 75% of prior year levels since stores have reopened, with stronger trends in Mainland China. Results have improved since initial reopenings across all regions.

Total company e-commerce revenue increased in the fourth quarter, and growth accelerated in the first quarter of fiscal 2021 to a strong double digit increase compared to prior year.

During the first quarter of fiscal 2021, the company’s global store base was closed for an average of approximately 55% of the period. Given the significant store closures, the gradual recovery in revenue as stores reopen as well as low wholesale shipments, the company expects first quarter fiscal 2021 revenues to decline approximately 70% compared to prior year. Due to the lower revenue and resulting deleverage, the company anticipates a significant loss per share in the first quarter.

Capri Holdings fourth quarter fiscal 2020 results showed total revenue of $1.2 billion decreased 11.3% compared to last year. On a constant currency basis, total revenue decreased 11.0%. Gross profit was $631 million and gross margin was 52.9%, compared to $793 million and 59.0% in the prior year. Adjusted gross profit was $723 million and adjusted gross margin was 60.7%, compared to $798 million and 59.4% in the prior year.

Loss from operations was $536 million and operating margin was (45.0)% compared to income of $40 million and operating margin of 3.0% in the prior year. Adjusted income from operations was $99 million and operating margin was 8.3%, compared to $125 million and 9.3% in the prior year.

Net loss was $551 million, or $(3.69) per diluted share compared to net income of $19 million, or $0.13 per diluted share in the prior year. Adjusted net income was $16 million, or $0.11 per diluted share, including the negative impact of $67 million, or $0.44 per diluted share of unanticipated non-cash valuation allowances.

Last year, adjusted net income was $95 million or $0.63 per diluted share. Net inventory at 28th March, 2020 was $827 million, a 13% decrease compared to the prior year.

Versace revenue of $213 million increased 55.5% compared to the prior year on a reported and constant currency basis. Versace operating loss was $2 million and operating margin was (0.9)% compared to an operating loss of $11 million and operating margin of (8.0)% in the prior year. Last year, adjusted operating loss was $6 million and adjusted operating margin was (4.4)%.

Jimmy Choo revenue of $107 million decreased 23.0% compared to the prior year. On a constant currency basis, total revenue decreased 24.5%. Jimmy Choo operating loss was $23 million and operating margin was (21.5)%, compared to operating loss of $8 million and operating margin of (5.8)% in the prior year.

SEE ALSO : Bed Bath & Beyond announces fourth quarter of 2019 finance report

Michael Kors revenue of $872 million decreased 18.4% compared to the prior year. On a constant currency basis, total revenue decreased 17.7%. Michael Kors operating income was $139 million and operating margin was 15.9%, compared to operating income of $166 million and operating margin of 15.5% in the prior year.

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