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2022-06-01 18:34

Shares of Capri Holdings Ltd closed up 1.0% on Wednesday after the global fashion luxury group reported its financial results for the fourth quarter that exceeded expectations. The NYSE-listed company is behind notable brands like Versace, Michael Kors and Jimmy Choo.
Capri Holdings Q4 financial highlights
The following results are compared to the fourth quarter fiscal 2021.

• 24.6% increase in revenue to $1.49 billion

• Swung to a net income of $81 million

• Adjusted Gross margin rose 20 bps to 63.7%

• Adjusted earnings per share of $1.02, an increase of 170%

• Net inventory was up 48.9% to $1.096 billion

FactSet consensus for adjusted EPS was 82 cents on $1.41 billion in revenue. In the earnings press release, CEO John D. Idol said:

“Capri Holdings achieved the highest revenue, gross margin and earnings per share in the company’s history. Additionally, we generated strong free cash flow and returned $650 million to shareholders in fiscal 2022.”

Other prominent figures
Other notable figures in the earnings report include a 34% year-over-year growth in revenue from Versace, a 25.8% increase from Jimmy Choo, and a 21.8% increase from Michael Kors.

Income from operations printed at $919 million compared to a loss of $139 million in the same quarter last year. The operating margin stood at 8.0% versus 11.6% in the previous year. Cost of sales in the recent quarter were up 16.5%.

Capri Holdings spent roughly $300 million to buyback 5.1 million of its own shares in the fiscal first quarter. Moving forward, the board authorized another $1.0 billion in stock repurchase on Wednesday.

Capri Holdings’ outlook for 2023
For the current fiscal quarter, Capri Holdings forecasts $1.35 of adjusted per-share earnings on $1.30 billion in revenue. In comparison, experts had called for adjusted EPS of $1.45 and revenue of $1.35 billion.
The New York-headquartered company foresees $5.95 billion in total revenue this year. It expects $6.85 of per-share earnings and operating margin at 18% in fiscal 2023. CEO Idol added:

“Looking forward in fiscal 2023, we expect to achieve another year of record revenue and EPS. Longer-term, we’re confident in our ability to resume double digit revenue increases as we move beyond the impact of current macro headwinds.”

The $7.37 billion company that trades at a PE multiple of 13.82 is currently down roughly 24% for the year.