Chief executive officer John Idol said Wednesday that Capri Holdings is pointed in the right direction as “trends improved sequentially” in the first quarter.
Net income rose to $56 million from $5 million a year earlier, with adjusted profits up to $60 million from $18 million. Adjusted earnings per share tallied 50 cents — much better than the 12 cents analysts had penciled in, according to Yahoo Finance.
Revenues for the three months ended June 28 slipped 6 percent to $797 million.
That included results from Michael Kors, where sales were down 5.9 percent, and Jimmy Choo, which was off 6.4 percent.
The Versace business was not included as it is being categorized as a discontinued operation pending its $1.4 billion sale to Prada in the second half.
Investors saw glimmers of better things ahead and traded shares of Capri up 9.8 percent to $20 in pre market trading on Wall Street — a welcome turnaround since the stock was down 44 percent over the past year, having never recovered from the company’s failed buyout by Tapestry Inc..
But Capri still has a long way to go and fourth-quarter results set the bar low, with adjusted losses of $581 million and a 15.4 percent decline in sales.
Once the cash deal to offload Versace goes through, Capri will be able to pay down its debt substantially, invest more in the business and start buying back stock again.
That would help the company build on its first-quarter results.
John Idol
Courtesy
Idol said the company’s start to the year “demonstrates the progress we are making as we execute against our strategic initiatives to energize our fashion luxury houses. While still early, we are beginning to see signs that our strategies are working.
“We remain on track to stabilize our business this year while establishing a solid foundation for a return to growth in fiscal 2027,” the CEO said. “Although the global macroeconomic environment remains dynamic, we are focused on positioning Capri Holdings to deliver multiple years of revenue and earnings growth as well as increase shareholder value.”