Capri plans price increases at Michael Kors and Versace as luxury fashion explodes

People walk near a Michael Kors store in Lakewood, Colorado June 1, 2016. REUTERS/Rick Wilking

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Feb 2 (Reuters) – Michael Kors owner Capri Holdings (CPRI.N) reported a 24% rise in holiday quarter sales on Wednesday and raised its outlook for the full year, saying it would increase still the prices of its brands to take advantage of soaring prices. high fashion demand.

Shares of the company, which also owns Versace and Jimmy Choo, jumped 10% as it continued a string of strong performances by luxury goods companies in recent weeks.

Capri joins European peers LVMH (LVMH.PA), Burberry (BRBY.L) and Prada in showing a strong rebound from the worst lows of the COVID-19 pandemic, thanks to locked-in consumers’ desire to indulge in designer bags handbags and clothes. Read more

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Like its rivals, Capri also said its sales were driven by demand in the United States and Europe. However, sales in mainland China slumped due to COVID-19-related lockdowns and store closures.

The company’s total revenue hit $1.61 billion in the third quarter ended Dec. 25, rebounding above pre-pandemic levels.

CEO John Idol said the company is now looking to reposition its brands, especially Versace, at higher price points.

“We’ve seen absolutely no consumer resistance to any of the price increases we’ve taken, and there will be others as well,” Idol said on a call with analysts.

Previous price increases and fewer promotions helped Capri increase profit margins amid rising manufacturing and shipping expenses.

“Capri continues to impress on revenue and margins as they have used the pandemic to reshape their business,” said BMO Capital Markets analyst Simeon Siegel.

“We believe they are one of the few brands emerging healthier from the pandemic.”

The company forecasts fiscal 2022 revenue of $5.56 billion, down from its previous estimate of $5.4 billion, while it expects annual earnings per share of $6. dollars, compared to $5.30 per share.

Capri also forecast fiscal 2023 revenue of about $6.1 billion, above analyst estimates of $5.97 billion.

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Reporting by Ananya Mariam Rajesh and Uday Sampath in Bengaluru; edited by Uttaresh.V

Our standards: The Thomson Reuters Trust Principles.

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