Capri profit misses as Hong Kong protests hurt Versace sales
today Nov 6, 2019
Capri Holdings Ltd missed Wall Street estimates for quarterly profit on Wednesday, as protests in Hong Kong and negative Chinese consumer reaction to an 'incorrectly labeled' T-shirt hurt sales of its Versace brand.
Milan-based Versace had come under fire in China as the luxury label sold a T-shirt that identified the Chinese-controlled territories of Hong Kong and Macau as countries.
Due to this, Versace lost its first Asia brand ambassador, Chinese actress Yang Mi, who terminated her contract with the brand.
Luxury labels rely on Hong Kong as a magnet for travelers and shoppers across Asia, and several months of pro-democracy protests have forced some retailers to close their doors.
The company said comparable sales for Versace was flat compared with a year earlier.
Capri said it expects third-quarter revenue of $1.53 billion (£1.19 billion), below analysts' average estimate of $1.60 billion.
Adjusted net income fell 7.8% to $177 million, or $1.16 per share, in the second quarter ended Sept. 28, from a year earlier and missed analysts' expectation of $1.24 per share.
Total revenue rose 15.1% to $1.44 billion, in line with analysts' estimates, according to IBES data from Refinitiv.
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