US-based Capri Holdings, the parent company of renowned brands Versace, Jimmy Choo and Michael Kors, has announced a tough first quarter for fiscal year 2025 (Q1 FY25), with total revenue down 13.2 percent year-on-year (YoY) to $1.07 billion. In constant currency, total revenue fell 12.1 percent. The decline was driven by declining demand for luxury fashion items globally, which impacted both the retail and wholesale segments. Retail sales fell in the low double digits, while wholesale revenue saw a decline in the high double digits, the company stated in a press release.
Capri Holdings reported a year-over-year decline in revenue of 13.2 percent to $1.07 billion in the first quarter of fiscal 2025, driven by declining demand for luxury goods. The company posted a net loss of $14 million, compared with a profit of $48 million last year. Versace, Jimmy Choo and Michael Kors all reported revenue declines, although customer databases grew. Operating margins fell across all brands.
The company’s gross profit for the quarter was $689 million, with a gross margin of 64.6 percent, down from $812 million and a gross margin of 66.1 percent in the same period a year ago. Capri Holdings posted an operating loss of $8 million, with an operating margin of minus 0.7 percent, a significant decrease from the prior year’s operating income of $80 million and an operating margin of 6.5 percent. Adjusted operating income was $16 million, resulting in an adjusted operating margin of 1.5 percent, compared to $111 million and 9 percent a year ago, the company said in a news release.
Net loss for the first quarter of fiscal '25 was $14 million, or $0.11 per diluted share, a stark contrast to net income of $48 million, or $0.41 per diluted share, reported a year ago. On an adjusted basis, net income was $4 million, or $0.04 per diluted share, compared to $88 million, or $0.74 per diluted share, in the same period last year. The Company's net inventory as of June 29, 2024 was $902 million, representing a decrease of 23 percent compared to the prior year.
Versace revenue was $219 million, down 15.4 percent on a reported basis and 14.3 percent on a constant currency basis. Retail sales were down in the high single digits, while wholesale revenue fell in the double digits. Versace revenue in the Americas fell 15 percent, in Europe, the Middle East and Africa (EMEA) by 22 percent, and in Asia by 3 percent. Despite the decline, Versace’s global customer database increased by 1.3 million new consumers, a 20 percent increase over last year. However, the brand reported an operating loss of $17 million, with an operating margin of minus 7.8 percent, down from an operating income of $3 million and an operating margin of 1.2 percent in the prior year.
Jimmy Choo revenue stood at $173 million, down 5.5% on a reported basis and 3.8% on a constant currency basis. Retail sales declined in the mid-single digits and wholesale revenue fell in the low single digits. Revenue in the Americas grew 6%, while revenue in EMEA declined 5% and in Asia 17%. Jimmy Choo’s global customer base expanded by 0.7 million new consumers, reflecting 13% growth over the past year. The brand reported an operating profit of $4 million, with an operating margin of 2.3%, compared to $16 million and 8.7% in the prior year.
Michael Kors reported revenue of $675 million, down 14.2% on a reported basis and down 13.3% on a constant currency basis. The decline was primarily due to lower global demand for luxury fashion goods. Retail sales declined 15%, while wholesale revenue fell a further 15%. The Americas saw revenue decline 10%, EMEA 21% and Asia 23%. Despite these challenges, Michael Kors’ global customer base increased by 10.6 million new consumers, a 15% growth over last year. Operating income for the brand was $75 million, with an operating margin of 11.1%, compared to $130 million and 16.5% a year earlier. previous year.
“Overall, we were disappointed with our first quarter results as performance continued to be impacted by declining global demand for luxury fashion goods. We continue to manage our operating expenses and inventory levels carefully in light of the challenging global retail environment. Looking ahead, we remain focused on executing our strategic initiatives to deliver long-term, sustainable growth across each of our luxury houses,” he said. John D Idol, President and CEO of Capri Holdings.
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