Michael Kors's Revenue Declined By 4.8% Capri, And Sales Expectations Were Lowered.

Capri Holdings Ltd (Capri Holdings) failed to achieve its expected revenue for the quarter, and has lowered its annual sales forecast. The high-end fashion company is struggling to cope with slowing demand for Michael Kors brands in department stores and its own retail stores.

Michael Kors occupies most of the sales share of the group, but the brand still depends heavily on the sale of department stores. But as more and more shoppers choose to shop online, department store sales are struggling.

The brand is also reducing the discount rate and inventory pressure of its stores, with a view to promoting more full price sales.

Although the move to raise full price sales brought better than expected quarterly profits, it also affected the flow of Kors shops, resulting in a drop in sales in the same quarter.

Analysts in Jane Hali&Associates, a research firm, say that demand for high-end handbags has slowed in recent months as more and more consumers choose to buy retro wind pockets and fashion bags.

Michael Kors's revenue declined by 4.8% to 981 million dollars, and sales of Capri's Jimmy shoes Choo Jimmy declined by 8.7% to $158 million.

However, Capri's Italy luxury fashion brand Versace is a highlight of the group. Its quarterly revenue was $207 million, exceeding the average forecast of $202 million 370 thousand by 4 analysts. Last year, Capri bought Versace for about $2 billion to help it enter the European affluent consumer market.

The net profit of the group dropped from $186 million to $45 million due to $97 million in impairment. The company's earnings per share were 95 cents, exceeding analysts' expectations of 90 cents.

According to the IBES data provided by Refinitiv, the total revenue of the group increased by nearly 12% to $1 billion 350 million, lower than the average analyst estimate of $1 billion 370 million.

Capri expects annual revenue of $5 billion 800 million, down from the previous forecast of $6 billion.

However, the company maintains its annual earnings forecast of $4.95 per share unchanged, which now includes the recent US announcement of tariffs on products produced in China. Jamie Merriman, an analyst at Bernstein, said earnings guidelines remain unchanged, which may ease pressure on Capri shares in the short term. He added that Michael Kors, as a brand, still has many potential problems in terms of poor sales and low brand image.

Capri's shares have fallen nearly 17% this year, up 4.5% in pre opening trading. Author: Reuters