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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Capri Holdings Limited | NYSE:CPRI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.005 | -0.02% | 32.305 | 32.39 | 32.09 | 32.26 | 265,568 | 15:46:32 |
Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results for the fourth quarter and full year fiscal 2024 ended March 30, 2024.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240529961065/en/
(Photo: Business Wire)
Fourth Quarter Fiscal 2024 Highlights
John D. Idol, the Company’s Chairman and Chief Executive Officer said, "Overall, we were disappointed with our results as performance in the fourth quarter continued to be impacted by softening demand globally for fashion luxury goods. In our retail channel, sales trends improved sequentially in the Americas and EMEA while trends slowed in Asia. In our wholesale channel, sales remained challenged."
Mr. Idol continued, "Versace, Jimmy Choo and Michael Kors continued to resonate with consumers as evidenced by the 11.6 million new consumers added across our databases, representing 14% growth versus last year. This reflects the strong brand equity and enduring value of our three iconic houses. Looking forward, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across each of our luxury houses."
Mr. Idol concluded, “Last August Capri Holdings announced that we entered into a definitive agreement to be acquired by Tapestry. In April, the FTC filed an unprecedented lawsuit to block the proposed transaction. We strongly disagree with the FTC's decision and firmly believe in the merits of this acquisition. The market realities, which the government’s challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition. Tapestry and Capri operate in the fiercely competitive and highly fragmented global fashion luxury industry. Consumers have hundreds of handbag choices at every price point across all channels, and barriers to entry are low. As we previously stated, Capri intends to vigorously defend this case in court alongside Tapestry and we look forward to the successful completion of the pending acquisition. This combination will deliver value to our shareholders as well as provide new opportunities for our dedicated employees around the world as Capri Holdings becomes part of a larger and more diversified company. By joining with Tapestry, our brands will have greater resources and capabilities to accelerate the expansion of their global reach while preserving their unique DNA.”
Fourth Quarter Fiscal 2024 Results
Financial Results and non-GAAP Reconciliation
The Company’s results are reported in this press release in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and on an adjusted, non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information is provided at the end of this press release.
Overview of Capri Holdings Fourth Quarter Fiscal 2024 Results
Versace Fourth Quarter Fiscal 2024 Results
Jimmy Choo Fourth Quarter Fiscal 2024 Results
Michael Kors Fourth Quarter Fiscal 2024 Results
Outlook
As previously stated, given the pending merger transaction of Capri Holdings Limited by Tapestry, Inc., the Company does not intend to provide financial guidance.
Use of Non-GAAP Financial Measures
Constant currency effects are non-GAAP financial measures, which are provided to supplement our reported operating results to facilitate comparisons of our operating results and trends in our business, excluding the effects of foreign currency rate fluctuations. Because we are a global company, foreign currency exchange rates may have a significant effect on our reported results. We calculate constant currency measures and the related foreign currency impacts by translating the current year’s reported amounts into comparable amounts using prior year’s foreign exchange rates for each currency. All constant currency performance measures discussed below should be considered a supplement to and not in lieu of our operating performance measures calculated in accordance with U.S. GAAP. Additionally, this earnings release includes certain non-GAAP financial measures that exclude certain costs associated with restructuring and other charges, ERP implementation costs, COVID-19 related expenses, war in Ukraine related costs, Capri transformation costs, costs related to the pending merger transaction with a wholly-owned subsidiary of Tapestry, Inc. (the "Merger") and long-lived asset impairments. The Company uses non-GAAP financial measures, among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. The Company believes that excluding these items helps its management and investors compare operating performance based on its ongoing operations. While the Company considers the non-GAAP measures to be useful supplemental measures in analyzing its results, they are not intended to replace, nor act as a substitute for, any amounts presented in its consolidated financial statements prepared in conformity with U.S. GAAP and may be different from non-GAAP measures reported by other companies.
About Capri Holdings Limited
Capri Holdings is a global fashion luxury group consisting of iconic, founder-led brands Versace, Jimmy Choo and Michael Kors. Our commitment to glamorous style and craftsmanship is at the heart of each of our luxury brands. We have built our reputation on designing exceptional, innovative products that cover the full spectrum of fashion luxury categories. Our strength lies in the unique DNA and heritage of each of our brands, the diversity and passion of our people and our dedication to the clients and communities we serve. Capri Holdings Limited is publicly listed on the New York Stock Exchange under the ticker CPRI.
Forward Looking Statements
This press release contains statements which are, or may be deemed to be, “forward-looking statements.” Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Capri about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. All statements other than statements of historical facts included herein, may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions, which could cause actual results to differ materially from those projected or implied in any forward-looking statements, including regarding the pending Merger. These risks, uncertainties and other factors include but are not limited to, our ability to respond to changing fashion, consumer traffic and retail trends; fluctuations in demand for our products; high consumer debt levels, recession and inflationary pressures; loss of market share and increased competition; reductions in our wholesale channel; the impact of the COVID-19 pandemic, or other unforeseen epidemics, pandemics, disasters or catastrophes; levels of cash flow and future availability of credit; Capri's ability to successfully execute its growth strategies; departure of key employees or failure to attract and retain highly qualified personnel; risks associated with operating in international markets and global sourcing activities, including disruptions or delays in manufacturing or shipments; the risk of cybersecurity threats and privacy or data security breaches; extreme weather conditions and natural disasters; general economic, political, business or market conditions; acts of war and other geopolitical conflicts; the outcome of the U.S. Federal Trade Commission's lawsuit attempting to block the pending Merger, the occurrence of any other event, change or other circumstances that could give rise to the termination of the merger agreement entered into in connection with the pending Merger; the risk that the parties to the merger agreement may not be able to satisfy the conditions to the pending Merger in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the pending Merger; the risk that any announcements relating to the pending Merger could have adverse effects on the market price of Capri's ordinary shares; the risk of any unexpected costs or expenses resulting from the pending Merger; the risk of any litigation relating to the pending Merger; the risk that the pending Merger could have an adverse effect on the ability of Capri to retain and maintain relationships with customers, suppliers and other business partners and retain and hire key personnel and on its operating results and business generally, as well as those risks that are outlined in Capri’s disclosure filings and materials, which you can find on http://www.capriholdings.com, such as its Form 10-K, Form 10-Q and Form 8-K reports that have been filed with the SEC. Please consult these documents for a more complete understanding of these risks and uncertainties. Any forward-looking statement in this press release speaks only as of the date made and Capri disclaims any obligation to update or revise any forward-looking or other statements contained herein other than in accordance with legal and regulatory obligations.
SCHEDULE 1
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)
Three Months Ended
Fiscal Years Ended
March 30, 2024
April 1, 2023
March 30, 2024
April 1, 2023
Total revenue
$
1,223
$
1,335
$
5,170
$
5,619
Cost of goods sold
456
468
1,831
1,895
Gross profit
767
867
3,339
3,724
Total operating expenses
1,310
907
3,580
3,045
(Loss) income from operations
(543
)
(40
)
(241
)
679
Other income, net
(1
)
(1
)
(1
)
(3
)
Interest (income) expense, net
(6
)
11
6
24
Foreign currency loss
21
20
37
10
(Loss) income before (benefit) provision for income taxes
(557
)
(70
)
(283
)
648
(Benefit) provision for income taxes
(85
)
(37
)
(54
)
29
Net (loss) income
(472
)
(33
)
(229
)
619
Less: Net income attributable to noncontrolling interests
—
1
—
3
Net (loss) income attributable to Capri
$
(472
)
$
(34
)
$
(229
)
$
616
Weighted average ordinary shares outstanding:
Basic
117,156,327
123,327,209
117,014,420
132,532,009
Diluted
117,156,327
123,327,209
117,014,420
134,002,480
Net income (loss) per ordinary share:
Basic
$
(4.03
)
$
(0.28
)
$
(1.96
)
$
4.65
Diluted
$
(4.03
)
$
(0.28
)
$
(1.96
)
$
4.60
SCHEDULE 2
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
March 30, 2024
April 1, 2023
Assets
Current assets
Cash and cash equivalents
$
199
$
249
Receivables, net
332
369
Inventories, net
862
1,057
Prepaid expenses and other current assets
215
195
Total current assets
1,608
1,870
Property and equipment, net
579
552
Operating lease right-of-use assets
1,438
1,330
Intangible assets, net
1,394
1,728
Goodwill
1,106
1,293
Deferred tax assets
352
296
Other assets
212
226
Total assets
$
6,689
$
7,295
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable
$
352
$
475
Accrued payroll and payroll related expenses
107
154
Accrued income taxes
64
73
Short-term operating lease liabilities
400
429
Short-term debt
462
5
Accrued expenses and other current liabilities
310
314
Total current liabilities
1,695
1,450
Long-term operating lease liabilities
1,452
1,348
Deferred tax liabilities
362
508
Long-term debt
1,261
1,822
Other long-term liabilities
319
318
Total liabilities
5,089
5,446
Commitments and contingencies
Shareholders’ equity
Ordinary shares, no par value; 650,000,000 shares authorized; 226,271,074 shares issued and 116,629,634 outstanding at March 30, 2024; 224,166,250 shares issued and 117,347,045 outstanding at April 1, 2023
—
—
Treasury shares, at cost (109,641,440 shares at March 30, 2024 and 106,819,205 shares at April 1, 2023)
(5,458
)
(5,351
)
Additional paid-in capital
1,417
1,344
Accumulated other comprehensive income
161
147
Retained earnings
5,479
5,708
Total shareholders’ equity of Capri
1,599
1,848
Noncontrolling interest
1
1
Total shareholders’ equity
1,600
1,849
Total liabilities and shareholders’ equity
$
6,689
$
7,295
SCHEDULE 3
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT DATA
($ in millions)
(Unaudited)
Three Months Ended
Fiscal Years Ended
March 30, 2024
April 1, 2023
March 30, 2024
April 1, 2023
Revenue by Segment and Region:
Versace
The Americas
$
87
$
88
$
338
$
408
EMEA
105
118
444
468
Asia
72
68
248
230
Versace Revenue
264
274
1,030
1,106
Jimmy Choo
The Americas
41
45
176
196
EMEA
58
62
266
255
Asia
38
44
176
182
Jimmy Choo Revenue
137
151
618
633
Michael Kors
The Americas
519
571
2,298
2,616
EMEA
189
203
791
819
Asia
114
136
433
445
Michael Kors Revenue
822
910
3,522
3,880
Total Revenue
$
1,223
$
1,335
$
5,170
$
5,619
(Loss) Income from Operations:
Versace
$
1
$
14
$
25
$
152
Jimmy Choo
(8
)
(7
)
3
38
Michael Kors
116
147
634
868
Total segment income from operations
109
154
662
1,058
Less: Corporate expenses
(65
)
(62
)
(275
)
(233
)
Restructuring and other charges
(30
)
(5
)
(33
)
(16
)
Impairment of long-lived assets
(549
)
(130
)
(575
)
(142
)
Merger related costs
(8
)
—
(20
)
—
Impact of war in Ukraine
—
—
—
3
COVID-19 related charges
—
3
—
9
Total (Loss) Income from Operations
$
(543
)
$
(40
)
$
(241
)
$
679
Operating Margin:
Versace
0.4
%
5.1
%
2.4
%
13.7
%
Jimmy Choo
(5.8
)%
(4.6
)%
0.5
%
6.0
%
Michael Kors
14.1
%
16.2
%
18.0
%
22.4
%
Capri
(44.4
)%
(3.0
)%
(4.7
)%
12.1
%
SCHEDULE 4
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
SUPPLEMENTAL RETAIL STORE INFORMATION
(Unaudited)
As of
Retail Store Information:
March 30, 2024
April 1, 2023
Versace
236
223
Jimmy Choo
234
237
Michael Kors
769
812
Total number of retail stores
1,239
1,272
SCHEDULE 5
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSTANT CURRENCY DATA
(In millions)
(Unaudited)
Three Months Ended
% Change
March 30, 2024
April 1, 2023
As
Reported
Constant
Currency
Total revenue:
Versace
$
264
$
274
(3.6
)%
(2.9
)%
Jimmy Choo
137
151
(9.3
)%
(9.3
)%
Michael Kors
822
910
(9.7
)%
(9.2
)%
Total revenue
$
1,223
$
1,335
(8.4
)%
(7.9
)%
Fiscal Years Ended
% Change
March 30, 2024
April 1, 2023
As
Reported
Constant
Currency
Total revenue:
Versace
$
1,030
$
1,106
(6.9
)%
(7.9
)%
Jimmy Choo
618
633
(2.4
)%
(3.0
)%
Michael Kors
3,522
3,880
(9.2
)%
(9.5
)%
Total revenue
$
5,170
$
5,619
(8.0
)%
(8.4
)%
SCHEDULE 6
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except share and per share data)
(Unaudited)
Three Months Ended March 30, 2024
As
Reported
Impairment of Assets(1)
Restructuring and Other Charges (2)
ERP Implementation (3)
Capri Transformation(4)
Merger Costs
As
Adjusted
Gross profit
$
767
$
—
$
—
$
—
$
—
$
—
$
767
Operating expenses
$
1,310
$
(549
)
$
(30
)
$
(5
)
$
(29
)
$
(8
)
$
689
Total (loss) income from operations
$
(543
)
$
549
$
30
$
5
$
29
$
8
$
78
Foreign currency loss
$
21
$
—
$
—
$
—
$
—
$
—
$
21
(Loss) income before (benefit) provision for income taxes
$
(557
)
$
549
$
30
$
5
$
29
$
8
$
64
(Benefit) provision for income taxes
$
(85
)
$
86
$
7
$
1
$
4
$
1
$
14
Net (loss) income attributable to Capri
$
(472
)
$
463
$
23
$
4
$
25
$
7
$
50
Weighted average diluted ordinary shares outstanding
117,156,327
118,221,490
Diluted net (loss) income per ordinary share - Capri
$
(4.03
)
$
3.93
$
0.20
$
0.04
$
0.22
$
0.06
$
0.42
____________________
(1)
Asset impairment charges primarily relate to the impairment of the Jimmy Choo Retail and Wholesale reporting units goodwill and Versace and Jimmy Choo brand intangible assets, as well as the impairment of certain operating lease right-of-use assets.
(2)
Amounts impacting operating expenses primarily relate to Global Optimization Plan costs, equity awards associated with the acquisition of Gianni Versace S.r.l and severance expenses incurred during the fourth quarter.
(3)
Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(4)
The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure. During Fiscal 2024, the remaining transformation projects were paused due to the pending Merger and we will reassess this program, along with related timing, in Fiscal 2025.
SCHEDULE 7
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except share and per share data)
(Unaudited)
Fiscal Year Ended March 30, 2024
As
Reported
Impairment of Assets(1)
Restructuring and Other Charges (2)
ERP Implementation (3)
Capri Transformation(4)
Merger Costs
As
Adjusted
Gross profit
$
3,339
$
—
$
—
$
—
$
—
$
—
$
3,339
Operating expenses
$
3,580
$
(575
)
$
(33
)
$
(18
)
$
(113
)
$
(20
)
$
2,821
Total (loss) income from operations
$
(241
)
$
575
$
33
$
18
$
113
$
20
$
518
Foreign currency loss
$
37
$
—
$
(17
)
$
—
$
—
$
—
$
20
(Loss) income before (benefit) provision for income taxes
$
(283
)
$
575
$
50
$
18
$
113
$
20
$
493
(Benefit) provision for income taxes
$
(54
)
$
92
$
11
$
4
$
23
$
4
$
80
Net (loss) income attributable to Capri
$
(229
)
$
483
$
39
$
14
$
90
$
16
$
413
Weighted average diluted ordinary shares outstanding
117,014,420
118,057,806
Diluted net (loss) income per ordinary share - Capri
$
(1.96
)
$
4.10
$
0.33
$
0.12
$
0.77
$
0.14
$
3.50
____________________
(1)
Asset impairment charges primarily relate to the impairment of the Jimmy Choo Retail and Wholesale reporting units goodwill and Versace and Jimmy Choo brand intangible assets, as well as the impairment of certain operating lease right-of-use assets.
(2)
Amounts impacting operating expenses primarily relate to Global Optimization Plan costs, equity awards associated with the acquisition of Gianni Versace S.r.l and severance expense.
(3)
Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(4)
The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure. During Fiscal 2024, the remaining transformation projects were paused due to the pending Merger and we will reassess this program, along with related timing, in Fiscal 2025.
SCHEDULE 8
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except share and per share data)
(Unaudited)
Three Months Ended April 1, 2023
As Reported
Impairment of Assets
Restructuring and Other Charges (1)
COVID-19 Related Charges
ERP
Implementation(2)
Capri Transformation(3)
War in Ukraine
As Adjusted
Gross profit
$
867
$
—
$
—
$
(3
)
$
—
$
—
$
(1
)
$
863
Operating expenses
$
907
$
(130
)
$
(5
)
$
—
$
(5
)
$
(24
)
$
(1
)
$
742
Total (loss) income from operations
$
(40
)
$
130
$
5
$
(3
)
$
5
$
24
$
—
$
121
Foreign currency loss (gain)
$
20
$
—
$
(14
)
$
—
$
—
$
—
$
—
$
6
(Loss) income before provision for income taxes
$
(70
)
$
130
$
19
$
(3
)
$
5
$
24
$
—
$
105
(Benefit) for income taxes
$
(37
)
$
12
$
5
$
(1
)
$
1
$
3
$
—
$
(17
)
Net (loss) income attributable to Capri
$
(34
)
$
118
$
14
$
(2
)
$
4
$
21
$
—
$
121
Weighted average diluted ordinary shares outstanding
123,327,209
124,859,442
Diluted net (loss) income per ordinary share - Capri
$
(0.28
)
$
0.95
$
0.11
$
(0.02
)
$
0.04
$
0.17
$
—
$
0.97
____________________
(1)
Amounts impacting operating expenses primarily includes charges recorded in connection with the acquisition of Gianni Versace S.r.l. The foreign currency exchange loss represents a charge recognized in conjunction with restructuring activities to rationalize certain legal entities within our structure.
(2)
Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(3)
The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure.
SCHEDULE 9
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except share and per share data)
(Unaudited)
Fiscal Year Ended April 1, 2023
As Reported
Impairment of Assets
Restructuring and Other Charges(1)
COVID-19 Related Charges
ERP
Implementation(2)
Capri Transformation(3)
War in Ukraine
As Adjusted
Gross profit
$
3,724
$
—
$
—
$
(9
)
$
—
$
—
$
(1
)
$
3,714
Operating expenses
$
3,045
$
(142
)
$
(16
)
$
—
$
(25
)
$
(58
)
$
2
$
2,806
Total income from operations
$
679
$
142
$
16
$
(9
)
$
25
$
58
$
(3
)
$
908
Foreign currency loss (gain)
$
10
$
—
$
(14
)
$
—
$
—
$
—
$
—
$
(4
)
Income before provision for income taxes
$
648
$
142
$
30
$
(9
)
$
25
$
58
$
(3
)
$
891
Provision for income taxes
$
29
$
14
$
8
$
(2
)
$
6
$
13
$
(1
)
$
67
Net income attributable to Capri
$
616
$
128
$
22
$
(7
)
$
19
$
45
$
(2
)
$
821
Diluted net income per ordinary share - Capri
$
4.60
$
0.96
$
0.16
$
(0.05
)
$
0.13
$
0.34
$
(0.01
)
$
6.13
____________________
(1)
Amounts impacting operating expenses primarily includes charges recorded in connection with the acquisition of Gianni Versace S.r.l. The foreign currency exchange loss represents a charge recognized in conjunction with restructuring activities to rationalize certain legal entities within our structure.
(2)
Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(3)
The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240529961065/en/
Investor Relations: Jennifer Davis +1 (201) 514-8234 Jennifer.Davis@CapriHoldings.com
Media: Press@CapriHoldings.com
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