Capri Holdings (NYSE: CPRI), owner of Michael Kors and Versace, beat earnings estimates on Wednesday. Amid the ongoing pandemic, the company sold its items at full price and proceeded to reduce manufacturing costs, ultimately sending shares up 7%.
Nevertheless, Capri does foresee a loss in the current quarter following store closures in Europe fueled by the virus.
“We are a year into the global pandemic that has profoundly impacted the entire world. Our thoughts and prayers remain with all those who have been affected. I am incredibly proud of our entire team and what Capri Holdings has been able to accomplish during this unprecedented time. Looking back over the last three quarters since the onset of COVID-19, we are encouraged by the performance of all our luxury houses, which illustrates the strength of our brands as well as the resilience and agility of our businesses,” said John D. Idol, the Company’s Chairman and Chief Executive Officer.
Capri has opted to sell most of its products via its own locations and e-commerce platforms, therefore decreasing dependence on other department stores that are battling closures as well.
The company reported third-quarter profit of USD179 Million or USD1.18 per share. Revenue amounted to USD1.30 Billion, lower than analyst estimated USD1.33 Billion.
The multinational fashion holding company’s adjusted margin grew 520 basis points within the third quarter in comparison to the previous year. Furthermore, Capri experienced a double-digit quarterly growth in Mainland China.
Mr. Idol added, “”We were pleased with our third quarter results as revenue improved sequentially and exceeded our expectations. As we continued to execute on our strategic initiatives, earnings were meaningfully higher than anticipated driven by significant gross margin expansion.”
Capri says it anticipates to reach pre-pandemic revenue and earnings by fiscal 2023, starting next year.