Capri Holdings, the parent company of Michael Kors, Versace, and Jimmy Choo brands, disclosed a 5.6% drop in revenues to $1.43 billion for the third quarter. The decline was attributed to weakened luxury consumer demand, particularly in the Americas, affecting retail segment sales.
The company experienced mid-single-digit declines in total retail sales, primarily due to subdued luxury consumer demand in the Americas and challenges with the Michael Kors Americas e-commerce rollout. Wholesale revenue also saw a decrease in the low-teens, driven by softer demand in the Americas and EMEA regions.
Across its brands, Versace recorded an 8.8% decline in revenue to $227 million, with weaker performance in the Americas and EMEA offsetting a 10% increase in Asia. Jimmy Choo’s revenue fell by 1.3% to $166 million, despite a 9% growth in Asia, countered by an 11% decline in the Americas. Michael Kors brand sales dropped by 5.6% to $1.03 billion, with single-digit declines observed across all markets.
Net income for the quarter stood at $105 million, or $0.88 per diluted share, compared to $225 million, or $1.72 per diluted share, in the previous year.
Commenting on the results, John D. Idol, Chairman and CEO of Capri Holdings, acknowledged the impact of softening demand for fashion luxury goods. However, he noted sequential improvement in sales trends, particularly in the retail channel, following the resolution of issues with the Michael Kors Americas e-commerce platform.
Despite the challenges, Capri Holdings continued to attract new consumers, adding 10.7 million new customers across its databases, representing a 13% increase compared to the previous year. This achievement underscores the enduring appeal and strong brand equity of Versace, Jimmy Choo, and Michael Kors.
The earnings update precedes Capri’s anticipated merger with Tapestry Inc, owner of Coach, which also reported its financial performance for the September-December quarter, with net sales rising to $2.08 billion.
