The company’s wholesale revenue also saw a low-double-digit decrease due to softer demand in the Americas. The gross profit for Capri Holdings stood at $832 million, with a gross margin of 64.4 per cent, showing a decrease from $951 million and 67.4 per cent in the prior year, Capri Holdings said in a media release.
Capri Holdings’ Q2 FY24 revenue fell 8.6 per cent to $1.29 billion, with sharper declines in constant currency terms.
Retail and wholesale in the Americas struggled, impacting Michael Kors’ e-commerce sales.
Gross profit and operating income decreased across all brands, including Versace and Jimmy Choo.
Net income and inventory levels also declined.
The income from operations was reported at $100 million with an operating margin of 7.7 per cent, a significant drop from $252 million and 17.8 per cent in the prior year. The adjusted income from operations was $157 million with an operating margin of 12.2 per cent, also lower than the previous year.
Net income was reported at $90 million, or $0.77 per diluted share, compared to $224 million, or $1.63 per diluted share, in the previous year. Adjusted net income also saw a decrease. The company’s net inventory as of September 30, 2023, was $1.1 billion, reflecting a 7 per cent decrease from the previous year, indicating effective inventory management. The company expects inventory levels to remain below prior year levels in the latter half of fiscal 2024.
Versace reported a revenue of $280 million, decreasing by 9.1 per cent on a reported basis and 11.7 per cent on a constant currency basis. Versace’s operating income was $35 million with an operating margin of 12.5 per cent, a decrease from the prior year.
Jimmy Choo experienced a revenue drop of 7 per cent on a reported basis and 9.2 per cent on a constant currency basis, with an operating loss of $9 million and an operating margin of minus 6.8 per cent.
Michael Kors reported a decrease in revenue by 8.6 per cent on a reported basis and 9.7 per cent on a constant currency basis. Operating income was $169 million with an operating margin of 19.2 per cent, lower than the previous year, the release added.
“Capri Holdings’ second quarter results were below our expectations due to macro-economic headwinds as well as e-commerce implementation related challenges. In early July, we implemented a new e-commerce platform for Michael Kors in the Americas. While we are excited about the long-term benefits, the transition negatively impacted our second quarter results. Additionally, during the quarter consumer demand for fashion luxury goods softened primarily in the Americas,” said John D Idol, the company’s chairman and chief executive officer.
Fibre2Fashion News Desk (DP)