Capri Holding Powers Through Supply Chain Troubles with $322 M Profit – WWD

Capri Holdings management through supply chain trouble enters the holiday season to post big profits in the third quarter and boost the outlook for the full year.

The company’s net income jumped 80% to $322 million, or $2.11 a share, from $179 million, or $1.18, a year earlier. Adjusted earnings of $2.22 per share easily exceeded the $1.69 expected by analysts.

Revenue for the three months ended December 25 rose 23.6 percent to $1.6 billion from $1.3 billion.

Investors liked what they saw and pushed Capri’s stock up 10.6% to $68 in pre-market trading on Wednesday.

John Idol, president and chief executive officer, said the quarter’s operating results “exceeded our expectations for revenue, operating margin, and earnings per share.”

Idol said: “We are especially proud of our performance amid the pandemic’s many difficulties, including regional restrictions and supply chain challenges.

Capri warned in the last quarter of the fiscal year that disruptions in the global supply chain pushed back the delivery date of goods by 45 to 60 days, with Michael Kors The most affected brands in the portfolio.

While the company’s inventory position isn’t what Idol expected during the holiday season, he said that the goods have been shipped to get them to market faster and the supply is adequate.

Capri ended the quarter with a 24% drop in inventory, including what the company describes as a “significant increase in in-transit inventory.”

The company said on-site inventory has limited revenue. But each of the company’s businesses outperformed this quarter.

* Michael Korsrevenue grew 20% to $1.2 billion on operating income of $335 million.

* Versace announced a 29% increase in revenue to $251 million on operating income of $32 million.

* Jimmy ChooThe company’s revenue grew 47% to $178 million, bringing operating income to $16 million.

“We are enhancing revenue and earnings guidance for fiscal 2022 based on the strength of all of our luxury homes. Looking to fiscal year 2023, we expect to generate double-digit revenue and earnings growth,” said Idol. “This outlook reflects the success of our ongoing strategic initiatives as well as the continued recovery from the global pandemic. In the long run, the power of Versace, Jimmy Choo and the location of Michael Kors Capri Holdings to deliver year-over-year revenue and earnings growth. ”

For the full fiscal year, Capri is looking to post revenue of $5.6 billion with diluted earnings per share of $6, where analysts are looking for revenue of $5.4 billion. dollars and earnings of $5.35.

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