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What’s Capri Holdings’ Fiscal 2020 Outlook for Its Major Brands?

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Performance in fiscal 2019

Capri Holdings (CPRI) declared its fourth-quarter and full-year fiscal 2019 (which ended on March 30) results on May 29. The company’s fourth-quarter revenue increased 13.9% to $1.34 billion and surpassed analysts’ estimate of $1.33 billion.

The company’s fiscal 2019 revenue grew 11% to $5.24 billion driven by a rise in Jimmy Choo’s revenue to $590 million from $223 million in fiscal 2018 and the revenue contribution of $137 million from Versace, which was acquired on December 31, 2018. Revenue from the Michael Kors brand grew 0.3% to $4.51 billion in fiscal 2019.

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Fiscal 2020 outlook

Capri Holdings expects revenue of about $6.0 billion in fiscal 2020. The company expects Versace’s revenue to grow to $900 million in fiscal 2020 supported by investments in brand engagement, expansion of its retail footprint, and development of omnichannel and e-commerce capabilities. Capri Holdings expects Jimmy Choo’s revenue to increase to $650 million driven by continued focus on women’s footwear, growth of its accessories business, and expansion of the retail fleet.

Unlike its outlook for Versace and Jimmy Choo brands, Capri Holdings expects the revenue of its Michael Kors brand to decline to $4.45 billion in fiscal 2020 from $4.51 billion in fiscal 2019. Michael Kors’ revenue is expected to be adversely impacted by currency headwinds and lower wholesale revenue. Capri Holdings intends to improve the performance of its Michael Kors brand through various initiatives including product innovation, increasing brand engagement, marketing efforts, and remodeling of stores.

Capri Holdings’ revenue outlook lagged analysts’ forecast of $6.1 billion. The company expects adjusted EPS of $4.95 in fiscal 2020 compared to $4.97 in fiscal 2019. Analysts were expecting adjusted EPS of $4.96.

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