Michael Kors-owner Capri posts quarterly revenue above estimates

Capri Holdings beat revenue estimates for the fourth quarter on Wednesday, as new designs and a renewed focus on its Michael Kors line helped to bring back customers.

Capri has focused on the Michael Kors brand after a failed merger attempt with Coach parent company Tapestry. In April, Capri sold its struggling Versace brand to Italian rival Prada for $1.38 billion.

Capri CEO John Idol stated that they were confident of their ability to grow Michael Kors' revenue to $4 billion and Jimmy Choo's to $800 millions over time while also restoring the operating margins to double-digits.

North American consumers have reduced their spending on luxury goods due to fears of price increases on essentials, such as food and clothing, in the months ahead. This is because supply chain costs are expected to rise in response.

Versace is now included in discontinued operations. The company expects a total revenue of between $3.3 and $3.4 billion.

Capri stated that the forecast does not include changes in global macroeconomic conditions or tariff rates. It also excludes higher inflation, lower consumer confidence and increased inflation.

According to data compiled and analyzed by LSEG, it posted a 15.4% decline in revenue for the quarter ending March 29. This compares to analysts' estimates of a 19.3% drop to $986.57 millions. (Reporting from Savyata Mihsra in Bengaluru, Editing by Anil d'Silva.)

(source: Reuters)