Capri Holdings Limited, a global fashion luxury group, announced its financial results for the fourth quarter and full year fiscal 2021 ended 27th March, 2021.
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It was reported that the revenue was flat to prior year, a sequential improvement relative to the third quarter. Retail sales increased 13% globally, with growth across all three luxury houses. E-commerce sales improved sequentially, increasing approximately 80%. Adjusted gross margin expanded 280 basis points versus prior year, with margin expansion across all luxury houses. Adjusted operating margin expansion of 360 basis points to 11.9%. Adjusted earnings per share of $0.38.
John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “Looking back on fiscal 2021, the COVID-19 pandemic has had a profound effect on the entire world. The unprecedented challenges tested our business and industry in ways we could never have imagined. Despite these challenges, we were encouraged by the performance of all three of our luxury houses, with revenue and earnings significantly exceeding our expectations. These results are a testament to the strength of our brands as well as the dedication, resilience and agility of the entire Capri Holdings team.”
Mr. Idol continued, “We were pleased with our fourth quarter results as revenue improved sequentially and exceeded our expectations. Retail sales increased 13% versus prior year, driven by an improvement in both e-Commerce and store sales. As we continued to execute on our strategic initiatives, earnings were higher than anticipated driven by better revenue results and gross margin expansion across all three of our luxury houses.”
Mr. Idol added, “During the year, we reevaluated and refined Capri Holding’s strategic direction to ensure the company emerges from the pandemic stronger and more profitable. For Versace and Jimmy Choo, we reaffirmed our long term plans and are even more enthusiastic about the prospects of these luxury houses. For Michael Kors, we recalibrated our plans to further elevate the brand positioning and deliver higher profit margins.”
Mr. Idol concluded, “Looking forward, we remain optimistic about the outlook for the fashion luxury industry and Capri Holdings. As the world starts to recover from the pandemic, we are confident in our growth opportunities for Versace, Jimmy Choo and Michael Kors. We believe our three luxury houses position Capri Holdings to deliver multiple years of revenue and earnings growth, as well as increase shareholder value.”
The total revenue of US$1.2 billion for the fourth quarter fiscal 2021 was approximately flat compared to last year. On a constant currency basis, total revenue decreased 3.8%. During the quarter, the Company experienced temporary door closures in geographies impacted by lockdowns associated with COVID-19 cases. On average, approximately 60% of the Company’s retail stores in EMEA and approximately 40% of the Company’s retail stores in Canada were closed during fourth quarter fiscal 2021.
Gross profit was US$737 million and gross margin was 61.6%, compared to US$631 million and 52.9% in the prior year. Adjusted gross profit was US$760 million and adjusted gross margin was 63.5%, compared to US$723 million and 60.7% in the prior year.
Loss from operations was US$139 million and operating margin was (11.6)% compared to a loss of US$536 million and operating margin of (45.0)% in the prior year. Adjusted income from operations was US$143 million and operating margin was 11.9%, compared to US$99 million and 8.3% in the prior year.
Net loss was US$183 million, or US$(1.21) per diluted share compared to a net loss of US$551 million, or US$(3.69) per diluted share in the prior year. Adjusted net income was US$59 million, or US$0.38 per diluted share. Last year, adjusted net income was US$16 million or US$0.11 per diluted share.
Net inventory at 27th March, 2021 was US$736 million, an 11% decrease compared to the prior year.
Versace revenue of US$235 million increased 10.3% compared to the prior year. On a constant currency basis, total revenue was approximately flat. Versace operating income was US$29 million and operating margin was 12.3% compared to an operating loss of US$2 million and operating margin of (0.9)% in the prior year.
Jimmy Choo revenue of US$124 million increased 15.9% compared to the prior year. On a constant currency basis, total revenue increased 10.3%. Jimmy Choo operating loss was US$18 million and operating margin was (14.5)%, compared to operating loss of US$23 million and operating margin of (21.5)% in the prior year.
Michael Kors revenue of US$838 million decreased 3.9% compared to the prior year. On a constant currency basis, total revenue decreased 6.5%. Michael Kors operating income was US$172 million and operating margin was 20.5%, compared to operating income of US$139 million and operating margin of 15.9% in the prior year.
The Company has maintained a strong financial position throughout the COVID-19 crisis. As a result, ahead of schedule, the Company terminated its US$230 million 364 day Revolving Credit Facility, effective 25th May, 2021. In addition, on 26th May, 2021, the Company terminated the covenant relief waiver entered into June 2020.
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The Company has reinstated its share repurchase authorization which has US$400 million of availability remaining. Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy, and other relevant factors. The program may be suspended or discontinued at any time.