Michael Kors parent Capri Holdings raises annual profit forecast

Michael Kors owner Capri Holdings Ltd on Wednesday raised its annual profit forecast, as it benefits from price increases and strong demand for its designer handbags and Jimmy Choo shoes in North America and Europe.

The company forecast fiscal 2022 earnings per share of about $5.30, compared with a prior forecast of $4.50 per share.

For the second quarter of the 2022 fiscal year, Capri reported a 17% increase in revenue to $1.3 billion over the previous year. Revenues and operating profit rose at all three of its brands: Versace, Jimmy Choo and Michael Kors. Overall, income from operations was $195 million and operating margin was 15.0%, compared to $153 million and operating margin of 13.8% in the previous year.

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John D. Idol, Capri Chairman and Chief Executive Officer, said, "We are pleased with our second quarter results with revenue, gross margin, operating margin and earnings per share all exceeding our expectations. This performance reflects the power of Versace, Jimmy Choo and Michael Kors as well as the execution of our strategic initiatives."

Idol continued: "We remain confident in the strength of our luxury houses and are pleased to be raising revenue and earnings guidance for the year. Our new outlook reflects both stronger revenue performance as well as greater than anticipated gross margin expansion driven by the execution of our strategic initiatives.

"The success of these initiatives is currently offsetting the COVID-19 related industry headwinds including supply chain delays and increased transportation costs. Looking forward as the world continues to recover from the impact of the global pandemic, we remain confident in the growth opportunities for Versace, Jimmy Choo and Michael Kors."

FashionNetwork.com with reporting from Reuters