US' Capri Holdings' total revenue soars by 8.6% in Q2 FY23

In Q2 FY23, Capri Holdings’ adjusted gross profit was $948 million, compared to $879 million in Q2 FY22. Gross margin was 67.4 per cent, compared to 68.0 per cent in the same quarter of prior year, while the adjusted gross margin was 67.1 per cent, compared to 67.6 per cent.

Income from operations was $252 million and operating margin was 17.8 per cent in Q2 FY23, compared to $195 million and 15 per cent in the same quarter of prior year. Adjusted income from operations was $280 million and operating margin was 19.8 per cent, compared to $241 million and 18.5 per cent in Q2 FY22.

In Q2 FY23, net income was $224 million or $1.63 per diluted share, compared to $200 million or $1.30 per diluted share in Q2 of prior year, while the adjusted net income was $245 million or $1.79 per diluted share, compared to $235 million or $1.53 per diluted share.

Capri Holdings’ net inventory as of October 1, 2022, was $1.180 billion, a 36 per cent increase compared to the prior year. Relative to pre-COVID levels, second quarter inventory increased 10 per cent. This represents a sequential improvement and management continues to expect inventory levels to moderate through the year.

In Q2 FY23, Versace’s revenue was $308 million, increased 9.2 per cent, compared to $282 million in the same quarter of prior year. On a constant currency basis, total revenue increased 27.7 per cent, while the operating income was $62 million and operating margin was 20.1 per cent, compared to $55 million and 19.5 per cent in the prior year.

Jimmy Choo’s Q2 FY23 revenue was $142 million, increased 3.6 per cent, compared to $137 million in the Q2 of prior year. On a constant currency basis, total revenue increased 15.3 per cent, while the operating income was $8 million and operating margin was 5.6 per cent, compared to $1 million and 0.7 per cent in the prior year.

In Q2 FY23, Michael Kors’ revenue was $962 million, increased 9.2 per cent, compared to $881 million in the Q2 of prior year. On a constant currency basis, total revenue increased 14.6 per cent, while operating income was $248 million and operating margin was 25.8 per cent, compared to $220 million and 25 per cent in the prior year.

During the second quarter of FY23, the Capri Holdings repurchased approximately 7.1 million ordinary shares for approximately $350 million in open market transactions. Since the end of the second quarter, the company repurchased another 2.3 million ordinary shares for approximately $100 million pursuant to a 10b5-1 trading plan.

On November 9, 2022, the company announced that its board of directors approved a new share repurchase programme of up to $1 billion of its outstanding ordinary shares, providing additional capacity to return cash to shareholders over the longer term. This new two-year programme will replace the company’s existing $1 billion share repurchase programme which had $250 million of availability remaining.

For fiscal 2023, Capri Holdings is expecting a total revenue of approximately $5.7 billion, gross margin expansion of 50 basis points, operating margin of approximately 18.3 per cent, net interest expense of approximately $6 million, and effective tax rate of approximately 10 per cent. The company expects a weighted average diluted shares outstanding of approximately 136 million and diluted earnings per share of approximately $6.85. Furthermore, the company expects the ending inventory to be below prior year.

For Versace, the company expects a total revenue of approximately $1.15 billion and operating margin of approximately 16 per cent. For Jimmy Choo, it expects a total revenue of approximately $640 million and operating margin of approximately 5 per cent, and for Michael Kors, it expects a total revenue of approximately $3.91 billion and operating margin of approximately 25 per cent.

Fibre2Fashion News Desk (DP)