Michael Kors parent expects sales growth as luxury demand rebounds
(Reuters) -Capri Holdings Ltd on Wednesday forecast annual revenue and profit above Wall Street expectations, betting on shoppers returning to stores in the United States following speedy vaccinations and pent-up demand for luxury goods in Europe.
The company’s shares rose about 3% before the opening bell after quarterly results beat estimates.
Demand for luxury apparel and bags have rebounded as people resume traveling and begin to socialize after being stuck at home for more than a year, while a big stimulus program in the United States is expected to boost spending in the first half of the year.
“We remain optimistic about the outlook for the fashion luxury industry and Capri Holdings,” Chief Executive Officer John Idol said in a statement.
The company forecast revenue of about $5.1 billion for its fiscal 2022. Analysts were expecting $4.99 billion, according to IBES data from Refinitiv.
Capri reported revenue of $4.06 billion for fiscal 2021, compared with the $5.55 billion before the pandemic.
Bigger rivals LVMH, Hermes and Gucci-owner Kering were able to report sales above their pre-pandemic levels, largely helped by their online businesses, while smaller labels like Ferragamo and Tod’s still have to catch up.
Most luxury labels, traditionally reluctant to sell online fearing the proliferation of counterfeit goods, have invested heavily to shift to selling online.
Capri, which also owns Jimmy Choo and Versace, said e-commerce sales rose 80% in the fourth quarter, helping it beat total revenue estimates. Retail sales increased 13% from a year earlier, the company said.
It expects to earn about $3.70 to $3.80 per share, largely above the projection of $3.72.
Fourth-quarter revenue of $1.20 billion beat expectations of $1.02 billion. On an adjusted basis, the company earned 38 cents per share, surpassing the estimate of 2 cents.
The company also reinstated its share repurchase program, which has $400 million remaining.
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