Capri Group’s sales in the last quarter were higher than expected, and the outlook for fiscal year 2022 is optimistic
American luxury goods group Capri Holdings Ltd. (hereinafter referred to as “Capri”) on Wednesday announced key financial data for the fourth quarter of fiscal 2021 (as of March 27). Sales were roughly flat year-on-year, and continued to improve from the previous quarter, higher than analysts expected. Capri's revenue forecast for fiscal year 2022 is also higher than Wall Street's expectations. It expects that American consumers will return to stores after the vaccine is popularized, and the pent-up demand for luxury goods in Europe will also be released.
Capri's sales in the quarter exceeded expectations, mainly due to the strong demand for its high-end handbags and handbags, as well as the continuous growth of its e-commerce business. Its three brands, Michael Kors, Versace and Jimmy Choo have all achieved growth.
Affected by the epidemic, approximately 60% of retail stores in EMEA (Europe, Middle East and Africa) and approximately 40% of retail stores in Canada were temporarily closed during the quarter.
Capri said in the conference call that retail sales in Asia during the quarter grew by double digits year-on-year, while sales in mainland China increased by more than 100% year-on-year. All three of its brands have achieved growth again in mainland China.
Group CEO John Idol said in a statement: "We are satisfied with our fourth quarter results. Sales have continuously improved and exceeded our expectations. We remain optimistic about the prospects of the luxury fashion industry and Capri Holdings."
Looking ahead to fiscal year 2022, Capri expects total sales to be approximately US$5.1 billion, while according to Refinitiv's IBES data, analysts expect it to be US$4.99 billion. The group expects annual gross profit margin to increase by 0.5 percentage points; operating profit margin of approximately 14%; expected earnings per share to be between 3.70 and 3.80 US dollars, higher than analysts' expectations of 3.72 US dollars.
The group also announced the resumption of the remaining US$400 million share repurchase program.
For the three months ended March 27, Capri's key financial data are as follows:
Sales rose slightly from 1.19 billion U.S. dollars to 1.2 billion U.S. dollars, a decrease of 3.8% at constant exchange rates. According to Refinitiv's IBES data, analysts had expected it to be $1.02 billion;
E-commerce sales increased by 80% year-on-year;
Driven by both e-commerce and physical stores, retail sales increased by 13% year-on-year;
Gross profit increased from 631 million US dollars to 737 million US dollars, gross profit margin increased from 52.9% to 61.6%; adjusted gross profit margin increased by 2.8 percentage points year-on-year to 63.5%;
Operating loss narrowed from 536 million U.S. dollars to 139 million U.S. dollars, and operating profit margin narrowed from minus 45% to minus 11.6%; adjusted operating profit margin increased by 3.6 percentage points year-on-year to 11.9%;
Net loss narrowed from US$551 million to US$183 million, and diluted loss per share narrowed from US$3.69 to US$1.21; adjusted net profit was US$59 million, and adjusted EPS was US$0.38, exceeding expectations of US$0.2.
Versace (Versace) : Sales increased by 10.3% year-on-year to US$235 million, roughly flat at constant exchange rates; operating profit was US$29 million and operating profit margin was 12.3%; operating loss for the same period last year was US$2 million, operating profit margin was negative 0.9%;
Jimmy Choo : Sales increased by 15.9% year-on-year to US$124 million, an increase of 10.3% at constant exchange rates; operating loss narrowed from US$23 million to US$18 million, and operating profit margin narrowed from negative 21.5% to negative 14.5%;
Michael Kors : Sales increased by 3.9% year-on-year to US$838 million, down 6.5% at constant exchange rates; operating profit increased from US$139 million to US$172 million, and operating profit margin increased from 15.9% to 20.5 %;
For the 2021 fiscal year ending March 27, 2021, Capri's key financial data are as follows, compared with the previous fiscal year (as of the end of March 2020):
Sales decreased from US$5.55 billion to US$4.06 billion;
The gross profit decreased from 3.271 billion U.S. dollars to 2.597 billion U.S. dollars;
Operating profit of 19 million U.S. dollars, operating loss of 192 million U.S. dollars in the previous fiscal year;
The net loss narrowed from 223 million U.S. dollars to 62 million U.S. dollars.
Versace (Versace): Sales fell from 844 million U.S. dollars to 718 million U.S. dollars; operating profit was 21 million U.S. dollars, operating profit margin was 2.9%; last year, operating loss was 8 million U.S. dollars, operating profit margin was negative 0.9%;
Jimmy Choo (Zhou Yangjie): Sales fell from 555 million U.S. dollars to 418 million U.S. dollars; operating loss expanded from 13 million U.S. dollars to 55 million U.S. dollars, operating profit margin dropped from minus 2.3% to minus 13.2%;
Michael Kors (Mike Gao Shi): Sales fell from US$4.153 billion to US$2.924 billion; operating profit fell from US$850 million to US$595 million, and operating profit margin fell from 20.5% to 20.3%.