LONDON - Capri Holdings Limited (NYSE:CPRI), home to luxury fashion brands such as Versace, Jimmy Choo, and Michael Kors, reported a decline in revenue for the fourth quarter of the fiscal year 2024.
The company saw its revenue drop by 8.4% to $1.223 billion, a significant decrease from the $1.335 billion reported in the same quarter of the previous year. This decline also fell short of the analyst consensus estimate of $1.29 billion.
Adjusted earnings per share (EPS) for the quarter stood at $0.42, which was below the analyst estimate of $0.67. The company's adjusted operating margin also experienced a downturn, reported at 6.4% compared to 9.1% in the prior year.
John D. Idol, Chairman and Chief Executive Officer of Capri Holdings, expressed disappointment with the fourth-quarter performance, attributing the decline to a global softening in demand for luxury fashion goods. Despite the dip in sales, Idol highlighted the addition of 11.6 million new consumers across the company's databases, marking a 14% growth compared to last year. He emphasized the strong brand equity and enduring value of the company's luxury houses.
The financial results provided a bleak picture of the company's performance, with net loss widening to $472 million, or -$4.03 per diluted share, impacted by non-cash impairments. This is a stark contrast to the net loss of $34 million, or -$0.28 per diluted share, in the prior year. Gross profit margin saw a decrease, primarily driven by lower full-price sell-throughs.
In terms of individual brand performance, Versace's revenue decreased by 3.6% on a reported basis and 2.9% on a constant currency basis. Jimmy Choo's revenue fell by 9.3%, and Michael Kors experienced a 9.7% decline on a reported basis and a 9.2% decrease on a constant currency basis.
Looking ahead, Capri Holdings did not provide financial guidance due to the pending merger transaction with Tapestry (NYSE:TPR), Inc. However, the company anticipates free cash flow to normalize in Fiscal 2025. Idol concluded with remarks on the proposed acquisition by Tapestry, which is currently facing a legal challenge from the FTC. He reiterated the company's disagreement with the FTC's decision and the belief in the benefits of the merger for shareholders and employees.
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