Source: Bloomberg
Summary
Capri Holdings Ltd., the parent company of Michael Kors and Jimmy Choo, reported a stronger-than-expected first quarter, with revenue increasing 21% to $1.24 billion. The company’s adjusted earnings per share were 1.30 dollars, beating analysts’ estimates. However, the company’s shares fell 3.4% after it forecast lower-than-expected earnings for the full fiscal year, citing macroeconomic uncertainty and weakening consumer demand.
Our Reading
The trend returns with a new name.
Capri Holdings’ first-quarter success echoes the familiar pattern of luxury brands relying on high-end customers to drive growth. The company’s focus on revamping Michael Kors and Jimmy Choo’s product lines and store experiences is a well-trodden path. The forecasted trouble ahead suggests that the luxury market’s reliance on exclusivity and prestige may not be enough to shield it from economic uncertainty. The company’s efforts to appeal to younger consumers and expand its e-commerce presence may be too little, too late. As the luxury market’s cycles repeat, it’s clear that Capri Holdings is just trying to keep up.
Author: Evan Null
