Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Michael Kors parent rides on post-lockdown splurge to lift forecasts

Published 07/30/2021, 06:49 AM
Updated 07/30/2021, 10:38 AM
© Reuters. FILE PHOTO: People walk by a Michael Kors store in Lakewood, Colorado June 1, 2016. REUTERS/Rick Wilking/File Photo

© Reuters. FILE PHOTO: People walk by a Michael Kors store in Lakewood, Colorado June 1, 2016. REUTERS/Rick Wilking/File Photo

By Mehr Bedi

(Reuters) -Michael Kors parent Capri Holdings (NYSE:CPRI) Ltd on Friday raised its annual forecasts for the second time after trouncing Wall Street estimates for quarterly results, as shoppers splurge on its high-end clothes and bags.

The global luxury goods industry is betting that a resumption of social events and parties following speedy vaccinations will encourage more shoppers to spend on fashion after being stuck at home for more than a year.

Shares rose as much as 16% as revenue at Michael Kors nearly tripled, making it the biggest boost to total sales and signaling a recovery from pandemic lows.

"While it is clear, the world will continue to see challenges as the global pandemic evolves, including regional closures and temporary restrictions, ...the ultimate path to recovery remains strong", said Chief Executive John Idol.

The company's European peers Louis Vuitton-owner LVMH and Kering (PA:PRTP) have also reported a rebound.

LVMH posted record profitability and revenue at its Fendi, Loewe and Celine brands, while Kering said Yves Saint Laurent had reached a critical scale with sales bouncing back in all regions.

Capri, meanwhile, raised its forecast for annual revenue to about $5.3 billion, just about a month after predicting $5.15 billion, while warning that the Delta variant could dampen some expectations around a quick recovery in Europe.

However, its outlook did not account for any significant additional store shutdowns, extension of closures or fresh government curbs that could hurt traffic and sales trends.

© Reuters. FILE PHOTO: People walk by a Michael Kors store in Lakewood, Colorado June 1, 2016. REUTERS/Rick Wilking/File Photo

The Versace and Jimmy Choo owner forecast annual adjusted profit to be about $4.50 per share, higher than the $3.80 to $3.90 range predicted earlier.

Overall revenue nearly tripled to $1.25 billion in the first quarter compared to a year ago when stores were largely shut. Excluding items, the company earned a better-than-expected $1.42 per share.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.