Capri Holdings, the owner of brands like Michael Kors, Versace and Jimmy Choo, has performed better than analysts had expected in the last quarter. However, the required investments cut a great deal out of the profit.
In its latest quarter, ending on 29 June, Capri has achieved a 12 % turnover growth to 1.3 billion dollars (almost 1.2 billion euros). The young group, founded earlier this year, would even have had a 13.8 % profit growth if exchange rate fluctuations are ignored. The operational margin was higher than expected too, at 4.8 %, but came from 17.9 % a year earlier. Net profit plummeted from 186 million dollars to 45 million (40 million euros).
CEO John Idol says he is happy with the results, stressing that the current fiscal year is mainly targeted at investing in the newly formed group: "We are investing in Versace and Jimmy Choo to position these preeminent luxury houses for long term revenue growth and margin expansion. We are also executing on our strategic initiatives at Michael Kors to return the brand to growth." Capri's long time goal is to raise turnover to eight billion dollars; this year's target is to raise the operational margin to 15.5 % and the adjusted profit per share to 4.95 dollars (4.4 euros) per share.
Idol has lowered the forecast for the total expected turnover to 5.8 billion dollars (5.2 billion euros), mainly as Michael Kors faces adverse exchange rates and disappointing wholesale performances in North-America.