Michael Kors owner Capri estimates 70% plunge in first-quarter revenue

Michael Kors owner Capri Holdings on Wednesday estimated a bigger-than-feared 70% slump in first-quarter sales as the Covid-19 pandemic hammers demand for its luxury handbags and dresses.

The closing of major shopping hubs in Europe, Asia and North America had a major impact on March sales of luxury goods companies, including Capri’s three main units – Michael Kors, Versace and Jimmy Choo.

While business has begun to resume in parts of the world where lockdowns have eased, demand for clothing and accessories from high-end fashion companies is not expected to rebound quickly as the global economy enters a deep recession and major retailers teeter on the brink of collapse.

Capri said sales at its reopened stores were recovering stronger than it had initially expected, but shipments to department stores were still low and would result in “significant” losses in the first quarter.

Analysts had forecast a 46.7% fall in revenue in the first quarter ended June, according to IBES data from Refinitiv.
In delayed fourth-quarter results, Capri said total revenue fell 11.3% to $1.19 billion in the three months ended March 28, slightly above analysts’ average estimate of $1.12 billion.

The company reported a net loss attributable to Capri of $551 million in the fourth quarter compared with a profit of $19 million a year earlier.

On an adjusted basis, the company earned 11 cents per share.