Capri Holdings Reports Significant Revenue Decline and Net Loss in Latest Financial Results

Capri Holdings Limited reported a significant decline in financial performance for the three and nine months ended December 28, 2024, as detailed in its latest 10-Q filing. Total revenue for the third quarter decreased by 11.6% to $1.261 billion, down from $1.427 billion in the same period last year. For the nine-month period, revenue fell 13.7% to $3.407 billion compared to $3.947 billion in the prior year. The company attributed this decline primarily to a slowdown in global demand for luxury fashion goods and underperformance of strategic initiatives at its Versace and Michael Kors brands.

The company's net loss attributable to Capri was $547 million for the third quarter, a stark contrast to the net income of $105 million reported in the same quarter of the previous year. For the nine months, the net loss was $537 million, compared to a profit of $243 million in the prior year. The losses were exacerbated by substantial impairment charges totaling $675 million, primarily related to goodwill and intangible assets for the Jimmy Choo and Versace brands, reflecting the impact of declining consumer demand and the termination of a proposed merger with Tapestry, Inc.

Operationally, Capri Holdings has seen a reduction in its retail footprint, closing 43 stores in the nine months ended December 28, 2024, as part of a Global Optimization Plan aimed at streamlining operations. The total number of retail stores decreased to 1,205 from 1,270 a year earlier. The company also reported a decrease in selling, general, and administrative expenses, which fell by 6.4% to $1.968 billion for the nine-month period, although these expenses increased as a percentage of total revenue due to lower sales.

Looking ahead, Capri Holdings faces ongoing challenges from macroeconomic conditions, including inflation and changing consumer preferences, which could continue to impact its financial results. The company has indicated that it will reassess its strategic initiatives and operational efficiencies in response to these market conditions. Despite the current difficulties, Capri Holdings remains committed to its long-term growth strategy, focusing on enhancing brand positioning and operational effectiveness across its luxury brands.