The gross profit was recorded at $812 million, with a gross margin of 66.1 per cent, slightly down from $901 million and 66.3 per cent in the prior year. Adjusted figures show a gross profit of $812 million and a gross margin of 66.1 per cent, compared to $900 million and 66.2 per cent in the prior year, Capri Holdings said in a press release.

The company's operating income also experienced a significant drop in Q1 FY24, landing at $80 million and an operating margin of 6.5 per cent, compared to the $231 million and 17 per cent reported in the previous year. The adjusted income from operations stood at $111 million, with an operating margin of 9.0 per cent, compared to $251 million and 18.5 per cent in the previous year.

Net income for Q1 FY24 was $48 million, or $0.41 per diluted share, down substantially from the prior year's $201 million, or $1.40 per diluted share. The adjusted net income was $88 million or $0.74 per diluted share, compared to $215 million or $1.50 per diluted share in the prior year.

The company also reported net inventory as of July 1, 2023, at $1.166 billion, marking an 8 per cent decrease compared to the prior year.

Among the brands, Versace reported a 5.8 per cent decrease in revenue at $259 million in Q1 FY24, on both reported and constant currency basis. The operating income was $3 million with a significantly lower operating margin of 1.2 per cent, compared to $52 million and 18.9 per cent in the prior year.

Jimmy Choo, on the other hand, witnessed a revenue increase of 6.4 per cent, or 7 per cent on a constant currency basis, totalling $183 million. Its operating income was $16 million with an operating margin of 8.7 per cent, slightly down from $19 million and 11 per cent in the prior year.

Michael Kors faced the most challenges, with revenue decreasing by 13.8 per cent to $787 million. On a constant currency basis, the total revenue decreased by 13.4 per cent. Operating income was $130 million, and the operating margin was 16.5 per cent, a decline from $222 million and 24.3 per cent in the prior year, the release added.

"As announced earlier, the planned acquisition of Capri Holdings by Tapestry marks a major milestone for our company. It is a testament to all that our teams have achieved in building Versace, Jimmy Choo and Michael Kors into the iconic and powerful luxury fashion houses they are today. We are confident this combination will deliver immediate value to our shareholders. It will also 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, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands," said John D Idol, Capri Holdings' chairman and chief executive officer.

Fibre2Fashion News Desk (DP)