Capri Lowers Sales View as Michael Kors Brand Stumbles

Dow Jones08-05

Capri Holdings cut its full-year sales outlook as its Michael Kors brand is facing more challenges than previously expected.

The fashion company on Wednesday posted a profit of $69 million, or 60 cents a share, in the fiscal first quarter, compared with $53 million, or 44 cents a share, a year earlier.

Stripping out certain one-time items, adjusted per-share earnings were 67 cents, ahead of the 40 cents anticipated by analysts, according to FactSet.

Revenue fell 3.5% to $769 million. Analysts surveyed by FactSet had forecast revenue of $756.3 million. Sales from the Michael Kors brand fell 7%, while Jimmy Choo revenue increased by nearly 11%.

Capri cut its full-year revenue outlook to $3.4 billion, down from $3.53 billion, mainly because it expects Michael Kors to continue facing challenges.

The company anticipates a $50 million dent to sales due to inventory delays within the Michael Kors business, and another $50 million impact from softer trends in the Middle East due to the ongoing war with Iran. It also anticipates a $35 million hit from foreign exchange headwinds.

For the year, Michael Kors is now expected to generate $2.77 billion in sales, down from $2.9 billion.

The Jimmy Choo brand, meanwhile, is expected to grow and return to profitability during fiscal 2027, Chief Executive John Idol said. Jimmy Choo's revenue outlook was raised to $635 million, from $625 million.

For the current fiscal second quarter, the company projects $780 million in sales, below the $850.6 consensus estimate from Wall Street.

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