Capri Holdings Ltd, a global fashion luxury group, has reported a total revenue of $1.08 billion for the second quarter (Q2) of FY25 ended September 28, 2024, a decline of 16.4 per cent year-over-year (YoY). The gross profit of the company was $694 million and gross margin was 64.3 per cent, compared to $832 million and 64.4 per cent in the prior fiscal.
Cost of goods sold was valued at $385 million, down from $459 million in Q2 in the prior fiscal. Net income of the company was $24 million, or $0.20 per diluted share, compared to net income of $90 million, or $0.77 per diluted share, in the last fiscal. Adjusted net income was $77 million, or $0.65 per diluted share, compared to $133 million, or $1.13 per diluted share, in the last fiscal, stated Capri Holdings Ltd in its financial statement.
Gross profit margin declined 10 basis points with favourable channel mix offset by lower full price sell-throughs. The adjusted operating margin was 3.0 per cent and adjusted earnings per share was $0.65.
The loss from operations was $38 million and operating margin was (3.5) per cent, compared to income from operations of $100 million and operating margin of 7.7 per cent in the prior year. The adjusted income from operations was $32 million and adjusted operating margin was 3.0 per cent, compared to $157 million and 12.2 per cent in the prior year, stated the press release.
Brand-wise financial report for Q2 FY25
Versace generated a revenue of $201 million, witnessing a decline of 28.2 per cent on both reported basis and constant currency basis compared to prior year. Retail sales decreased high-teens while wholesale revenue decreased double-digits. Revenue in the Americas declined 33 per cent, while revenue in Europe, the Middle East and Africa (EMEA) decreased 28 per cent and revenue in Asia declined 20 per cent. Versace’s global database increased by 1.1 million new consumers, representing 16 per cent growth over the last year.
Versace’s operating loss was $3 million and operating margin was (1.5) per cent, compared to operating income of $35 million and operating margin of 12.5 per cent in the prior year. The decline in operating margin rate was primarily due to expense deleverage on lower revenue.
Jimmy Choo’s revenue of $140 million increased 6.1 per cent on a reported basis and 5.3 per cent on a constant currency basis compared to prior year. Retail sales decreased low-single-digits while wholesale revenue increased double-digits. Revenue in the Americas declined 8 per cent, while revenue in EMEA increased 25 per cent and revenue in Asia decreased 8 per cent. Jimmy Choo’s global database increased by 0.7 million new consumers, representing 13 per cent growth over the last year.
Jimmy Choo’s operating loss was $5 million and operating margin was (3.6) per cent, compared to operating loss of $9 million and operating margin of (6.8) per cent in the prior year. The improvement in operating margin rate was primarily due to expense leverage on higher revenue compared to the prior year, said the report.
Michael Kors’ revenue of $738 million decreased 16.0 per cent on a reported basis and 15.9 per cent on a constant currency basis compared to prior year. Retail sales decreased mid-single-digits while wholesale revenue declined double-digits. Revenue in the Americas decreased 12 per cent, while revenue in EMEA declined 15 per cent and revenue in Asia decreased 43 per cent. Michael Kors’ global database increased by 9 million new consumers, representing 12 per cent growth over the last year.
Michael Kors’ operating income was $87 million and operating margin was 11.8 per cent, compared to $169 million and 19.2 per cent in the prior year. The decline in operating margin rate was primarily related to expense deleverage on lower revenue.
Six-month (H1) financial reporting
The total revenue generated by the company in this period was $2,146 million, down from $2,520 million in the prior year. Cost of goods sold were $763 million, compared to $876 million in H1 of previous year and gross profit was $1,383 million, down from $1,644 million YoY. The net income was $11 million, compared to $138 million YoY, and net income attributable to Capri was $10 million, down from $138 million in H1 last fiscal.
The operating expenses of the company was $1,429 million, a slight decrease from $1,464 million in the prior year. Basic earnings per share (EPS) was $0.09, down from $1.18 in H1 last fiscal. Diluted EPS was $0.09, down from $1.17 in the prior fiscal.
John D Idol, the company’s chairman and chief executive officer, said, “Overall, we were disappointed with our Q2 results as performance continued to be impacted by softening demand globally for fashion luxury goods. Despite the challenging global retail environment, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across all three of our luxury houses.”
“Versace, Jimmy Choo and Michael Kors continued to resonate with consumers as evidenced by the 10.9 million new consumers added across our databases, representing 13 per cent growth versus last year. This reflects the strong brand equity and enduring value of our three iconic houses,” continued Idol.
Fibre2Fashion News Desk (SG)
