American firm Capri Holdings, the parent company of renowned brands Versace, Jimmy Choo, and Michael Kors, has reported a challenging first quarter for fiscal 2025 (Q1 FY25), with total revenue decreasing by 13.2 per cent year-over-year (YoY) to $1.07 billion. On a constant currency basis, total revenue fell by 12.1 per cent. The decline was driven by softening demand for fashion luxury goods globally, impacting both retail and wholesale segments. Retail sales dropped in the low-double digits, while wholesale revenue saw a decrease in the high-teens, the company stated in a press release.
Capri Holdings reported a 13.2 per cent YoY revenue decline to $1.07 billion in Q1 FY25, driven by softening demand for luxury goods.
The company posted a $14 million net loss, down from a $48 million profit last year.
Versace, Jimmy Choo, and Michael Kors all saw revenue declines, though customer databases grew.
Operating margins fell across the brands.
The company’s gross profit for the quarter was $689 million, with a gross margin of 64.6 per cent, down from $812 million and a gross margin of 66.1 per cent in the same period last year. Capri Holdings posted a loss from operations of $8 million, with an operating margin of minus 0.7 per cent, a significant decline from the previous year’s income from operations of $80 million and an operating margin of 6.5 per cent. Adjusted income from operations was $16 million, resulting in an adjusted operating margin of 1.5 per cent, compared to $111 million and 9 per cent in the prior year, the company said in a press release.
The net loss for Q1 FY25 was $14 million, or $0.11 per diluted share, a stark contrast to the net income of $48 million, or $0.41 per diluted share, reported in the previous year. On an adjusted basis, net income was $4 million, or $0.04 per diluted share, compared to $88 million, or $0.74 per diluted share, in the same period last year. The company’s net inventory as of June 29, 2024, was $902 million, representing a 23 per cent decrease compared to the prior year.
Revenue for Versace was $219 million, a decrease of 15.4 per cent on a reported basis and 14.3 per cent on a constant currency basis. Retail sales declined by high-single digits, while wholesale revenue fell by double digits. Versace’s revenue in the Americas dropped by 15 per cent, in Europe, the Middle East and Africa (EMEA) by 22 per cent, and in Asia by 3 per cent. Despite the decline, Versace’s global customer database grew by 1.3 million new consumers, a 20 per cent increase over the past year. However, the brand reported an operating loss of $17 million, with an operating margin of minus 7.8 per cent, down from an operating income of $3 million and an operating margin of 1.2 per cent in the prior year.
Revenue for Jimmy Choo stood at $173 million, marking a 5.5 per cent decrease on a reported basis and 3.8 per cent on a constant currency basis. Retail sales declined by mid-single digits, and wholesale revenue fell by low-single digits. Revenue in the Americas grew by 6 per cent, while revenue in EMEA decreased by 5 per cent and in Asia by 17 per cent. Jimmy Choo’s global customer database expanded by 0.7 million new consumers, reflecting a 13 per cent growth over the last year. The brand reported an operating income of $4 million, with an operating margin of 2.3 per cent, compared to $16 million and 8.7 per cent in the previous year.
Michael Kors reported revenue of $675 million, down 14.2 per cent on a reported basis and 13.3 per cent on a constant currency basis. The decline was primarily driven by global softening demand for fashion luxury goods. Retail sales decreased by low-teens, while wholesale revenue dropped by high-teens. The Americas saw a revenue decline of 10 per cent, EMEA by 21 per cent, and Asia by 23 per cent. Despite these challenges, Michael Kors’ global customer database increased by 10.6 million new consumers, a 15 per cent growth over the last year. The brand’s operating income was $75 million, with an operating margin of 11.1 per cent, compared to $130 million and 16.5 per cent in the prior year.
“Overall, we were disappointed with our first quarter results as performance continued to be impacted by softening demand globally for fashion luxury goods. We are continuing to manage our operating expenses and inventory levels carefully in light of the challenging global retail environment. Looking forward, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across each of our luxury houses,” said John D Idol, Capri Holdings’ chairman and chief executive officer.
Fibre2Fashion News Desk (DP)