CPRI - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. Welcome to Capri Holdings Limited First Quarter Fiscal 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. the Relations. to turn President Davis, now Investor of will conference Jennifer over Vice I you. Thank

may You begin.

Jennifer Davis

XXXX me Good joining Chief Officer Holdings fiscal and us everyone, Executive on call. morning, and and Officer, Capri Limited thank Officer, John Chief first Chief Chairman Operating morning are this you Idol; for conference and With Financial quarter Edwards. Tom

during uncertainties may subject let certain results from the statements Investors in today’s update uncertainties remain operative and this the call SEC that Company’s and to are which at actual Company’s me are made a in later should available are Company to release which you constitute that website. could remind assume the begin, statements, to we those obligation time, undertakes Before no on on call. made call Those forward-looking cause and we described not the that any will filings, risks statements risks press on differ discussed today’s information these expect. and

like basis. be earlier that website note our our GAAP measures I presented today view on and slides noted, certain the to view release discussed on implementation basis. costs charges. call today non-GAAP accompanying at presented a exclude non-GAAP on on to also posted measures costs, non-GAAP and otherwise would information the will These with information addition, a transformation restructuring website. corresponding To we Capri COVID-XX-related Unless related charges, earnings associated financial costs, posted all will reconciliation, ERP financial be In other capriholdings.com. today’s have certain please

Idol, the Executive turn like John would I call Chief over to Officer. to and Now, Chairman Mr.

John Idol

and strategic earnings growth opportunities Michael shared long-term a to morning, month, position around deliver we to at like years growth. strategies growth five during initiatives pillars, that revenue take our and our Investor Capri pillars I that and everyone. our form centered being Jennifer, moment are executed Capri Kors. multiple pillars. good you, Choo The Day. five of and strategic which Jimmy to Holdings strong Thank would Versace, supported These outlook Last now the foundation review Holdings’

First, full the our luxury maximize plan potential three distinct houses. fashion we to of

own consistent fashion is luxury. all brand unique philosophies they heritage, of have leadership with each its and While

create innovative Second, most we exciting and Michael led Versace, will Choi visions luxury the the of fashion design product, and Sandra Kors. by Donatella

fifth, upon Third, omnichannel our houses. communication we luxury leverage both to and our consumer with will accelerate Fourth, compelling externally. create deepen capabilities values desire seamless engagement each with and corporate build of we we will growth. And communities, to will revenue our internally

these We are are on already successfully executing our encouraged progress. and against strategies

as consumer by quarter revenue, growth houses per first earnings We databases. across to the consumers engagement, driven deepen of in robust all new gross expectations. share regions. they were our reflecting operating luxury first to their These margin strength desire our Total increased results continue to XXX%, and performance. turning were all quarter and million three adding channels XX across revenue margin, all and pleased exceeded significantly Now, that

points basis anticipated. XX.X%, and XX expanded operating margin meaningfully reached than better gross Additionally, margin both

per As share of a was well-ahead earnings result, of our expectation. $X.XX,

accessories the category faster we double sales are by excited more Consumer In and than success Revenue fearless than first much strong. accessories, of prior the continued We the well results All is growth designs and the Medusa strength ahead and initiatives. the performance of as in Versace. categories with which to demonstrating strategic with and women’s increased we collections by quarter, were saw were in improvement our traction positively was received La response with anticipated. pleased Starting performed our first Moving were bold of to quarter materially with consumers. the year. Virtus Versace’s expectations. we brand brand. growing the XXX% Overall,

We over levels. house billion prior The delivered leather for initiative to features Footwear dress and to are ability we Greca introduced the Greek Versace codes. brand which this positive. accessories strong was $X also expand confident In its our Versace active iconic focused expanding our a and we in April, is women, new iconic revenue build luxury core execute doubling as more position our time. year than leading key Sneaker addition In consumer our to on pattern. a response family performance women’s men on offering new as in with footwear, authority our to sales

Mer in Additionally, la incorporated the strength and Versace offerings featured pattern, we XXXX saw across both was Spring Show. women’s the ready-to-wear. Trésor Seasonal which de men’s Runway

to continue increase reach. core which Versace’s sales expand and house also incorporate to broaden lines, iconic our We codes

brand campaign Gaga’s out as Gaga a included collection. T-shirts. were showcased that Way tour Lady once to adorn the were capsule red to of crystal Leslie desire. including awareness capsule a well see in-person to quarter, Jonas, and to profits on a Zendaya, Versace encouraged June, on summer In Lipa, continues a extensive, La events Bieber, again and the deepen return Jr. jacket of Aldridge, Moving sold Lady We This presence Nick an the of portion during Versace blue wonderful skies featuring iconic, carpet The This mini unisex Foundation. The Gaga’s Usher. engagement. the took Liguria carpet world’s to Hailey campaign, with of celebrities. Lily as red the The celebrities collaboration sign the Odom hours The Very most famous was to capsule Vacanza, consumer opportunity brand’s summer a readdition and iconic Born fashion waters launched wore Italian and look Versace Foundation. very Versace consumer Riviera. Way for within the of and Atelier the recovery from an Versace’s Lady in clear Born donated Versace dressing Dua

followers XX% La introduce media social collection. Lipa pop accounts. thrilled also featured million has in her superstar Versace Greca new on brand with culture impeccable first style, among have database. she The the epitomizes fearless campaign, her increase and drive our speak reinforce the are Dua and in quarter to Versace’s brand where These of results to strong our icon long-term We year-over-year a house’s in potential. growth help the global appeal. Lipa Versace’s global the attitude Dua strength over confidence to universal XX initiatives, fall will Overall, luxury the others,

are over we have Moving seen Bon key our occasions. of accessories, initiatives. of strategic quarter. we signs first Choo. footwear, to increasing are XXX% ahead as our styles VARENNE, sales families: handbag XXX% the Sales were to and In of showed of as work, revenues robust Jimmy Bon. well expectations, growth three focus special Results beginning our benefits on realize people with growth In to continue the Madeline to hero and attending in enjoying in strong returning events dress handbags recovery women’s increased as we

The perform Results and represent opportunity Our the recent and continued Day, permanent the to This led a at and shared collection DIAMOND Investor Jimmy communication consumer sneaker for As at and Choo’s centered well a on Choo’s and the accessories quarter. in we X create Jimmy is new Monogram. core brand us one significant end design growth represent success core to collection. by codes Jimmy recognizable June DIAMOND initiatives enables translate and is were and growth JC its of that our to in STRAP Light three authentic DNA, fillers Choo. launched our of product footwear casual offerings Crystal, introductions categories identity our Pearl strategic of of collection was across

reaction The will expand initial growth gross Additionally, from consumers over margins us in enable time. the encouraging. core to has been collection

features campaign influencers Choo holidays In the hashtag red or in summer media activations terms million [indiscernible] the activation over Lizzo, XX views beach and Choo Beyoncé, showing with on Celebrities awareness Viola collection the carpet. and Laura Choo on Jimmy collection, Jimmy included generated a glamour. Zendaya. of ChooTravels. China consumer brand Jimmy XXXX social wearing XX a celebrates Jimmy back event, Davis, the Reese To our launch engagement, Witherspoon using capsule laid Dern, hosted had Choo’s summer strong and Weibo. The beach

social hashtag a Jimmy in collaborated weddings, proceeds the youth specifically suicide. IdoinChoo is Instagram. LGBTIQ user-generated of the content the a trending June, Choo To return on on The the enjoyed has Choo with sector. unique hashtag donated Jimmy of top a in Pride. collection’s Jimmy Choo is mark create to bridal capsule success In media, with With support the the Billy ending to mission coincide to Trevor portion release, Porter whose bridal Project,

Overall, Our optimistic we’re year-over-year Jimmy glamorous Choo’s database. future Jimmy to product about a contribute and global engaging marketing growth Choo’s consumer opportunities. increase XX% helped in

to We to to every casual blocks from footwear. have expand meet anytime, across and accessories all our key the our formal anywhere, needs building consumers’ day, assortments of

Michael turning to Now, Kors.

strength. broad-based increasing better than was Our compared year, first anticipated, quarter to XXX% revenues reflecting prior with performance

signature We with new consumers. across helping the Overall, and by continue our gross continue desire and signature our support offering to AURs. year, increase margins signature product last represented XX% Kors branding categories all we iconic compared resonated create as our With assortment penetration developing higher of Michael expanding to strategy, to XX% designs.

casual signature. excited in as styles In updates performed our we consumers Kors the responded styles. offering as consumers in Now, moving globally, channel fresh responded footwear, signature styles lux Consumers well Michael to branding. Revenue accessories. digits, positively energize increased also yet laid to updated our retail core back with to but triple to iconic continued

capitalized consumers’ Looking active in at on which women’s ready-to-wear, results we lifestyle. saw strong MKGO, our

to Turning men’s.

designs. XXX%, over The precious we elevated have on driven true see our to sterling men’s was one distinctive positive focused traditional platings semiprecious that we fastest-growing and Michael to Revenue in business continue increased by of and by watches metal to are jewelry, Kors. quarter DNA accessories. First categories styles jewelry, performance. response with watches sophisticated In silver, sales seen In stones. remains assortment, bold, at driven and a our our consumer strong

engagement, of reflects and jet Eye consumers brand which terms campaign, our we Michael’s our highly of consumer love Must set lifestyle. successful, awareness In and Travel continued the travel

commentary quintessential platforms. sun of influencers generate celebrating used quarter. our Kors more the around lifestyle. relevance and campaign our influencers social around community. launched activated support social generated were the wave profits again capsule We to we International, than strong was Pride, LGBTIQ campaign across trademarks Michael media launch logo. portion Hadid dedicated a heart new in-studio and advance of for million buzz the of took pattern in featured collection. from Yuanyuan, June, In summer, brand set of and stream global works Anniversary brand color, the greeting Wang Action and with lifelong jet Kors community accessories the preshow XXth China, jetsetter rights Lareina These the a with Michael LGBTIQ consumer Pride the in to Bella show, A of create which In which celebration globally. across Show. Michael’s featured featured live the Michael’s Song. ambassador impressions sea, in Bradshaw the Paramount rainbow donated XXX over a also Shanghai platforms by Theater local human the engagement Kors from Michael drove began OutRight are media filled For first event Gao The to followed the ambassadors, We and that which Feifei of

The As to consumer Overall, a in we in younger attracting XX% as continue generating a growth of Kors. marketing generated XX energy in These customers. database. of two high pillars the been well highlight place optimistic This years global brand speed, Asia. year-over-year result, to increase strategies views Kors’ the and contribute past have as over and million are the future optimism. we extremely new Michael our put about initiatives show helped engagement Michael

driving elevate power profitability. of our total, results Additionally, The to of focus we quarter we which luxury Capri expectations, houses the exceeded first positioning our three is our strategic of the of dedication, our is at higher continue brand demonstrating a employees the Michael experiencing today talent world. direct Kors, initiatives. Holdings’ and In all the strength the around are result execution of and significantly

Looking of are luxury progress goals the and making strategic with their the pleased are their we revenue forward, houses our pace towards growth.

recovery remains as including see and believe While regional the restrictions, it path evolves, world challenges continue to strong. global closures will temporary pandemic the the to ultimate clear, is we

Holdings challenging the to growth. times. three to Holdings, Capri has deliver As with and houses, years luxury earnings shown, we proven multiple positioned have these of powerful is successfully our navigate Capri revenue ability

Now, over turn Tom. call let to the me

Tom Edwards

was versus per morning, Thank increased earnings regions. margin. Performance first driven $X.XX was and of resulting exceeding XXX% you, income share in all our expectations. $XXX meaningfully with John, results across year, operating brands better-than-anticipated better-than-anticipated of good billion by Starting Revenue results. reflecting This revenue, margin our million, quarter and Net gross above was $X.XX. prior and expectations, everyone. diluted

were sales results improved trends XX% impact with channel. revenue And increased of XXX%. the initial traffic the by retail XX% trends which year. strongest well revenue In EMEA, Total sales as at as geography, store in total of initiatives. restrictions year. sales to sequentially approximately performing Retail In and compared XXX% by store an countries. increasing pandemic, the strong were revenue rebounded revenue Americas robust reflecting numerous sequentially, impacted driven clienteling last and increased that where sales. Asia, the These XX%, sales, stores Looking channel, increased company the improved was despite e-commerce XXX%. closed the wholesale By during of increased average increased prior store versus closures as revenue quarter, region

increased once performing Versace the revenue sales XXX Americas geography, year. expectations. also Asia of EMEA triple of increase the sales prior increased Revenue in By Versace and $XXX in the million, in to global with a June brand. luxury in Global increased and with with XXX%. increasing compared channel stores, e-commerce was Turning again revenue XXX% performance Store retail fleet XX%. increased digits. from revenue region digits. above prior XXX% was by net increasing our sales best four increase to retail our a triple year revenue XXX% ended

Asia also during XXX% Choo as channel Americas geography, initiatives. with our in Choo, Global XXX% revenue $XXX quarter XXX%. from revenue once again growth in Kors, XX%. retail quarter retail of Wholesale retail $XXX exceeding XXX increased million to best-performing was increased revenue X the Revenue strong XXX% began benefit e-commerce EMEA our our Jimmy million, expectations to in substantially above also E-commerce significantly. materially. digits. to fiscal increasing fleet increased of channel the global increased Store For increased sales revenue Global XXX% the digits, Michael also ended sales quarter total XXXX. increasing Jimmy as sales with last increase revenue well first triple By from in strategic region and sales while expectations. with increased the net a store a retail stores, in year, increased year. of increased shipments compared normalized of sales year-over-year XXX%. prior sales increased increased double the At we

However, wholesale remained performing strategic well revenue was below Kors, smaller line initiative have historic The our with improving global Michael with in the while revenue region best Americas also levels, to Michael business, wholesale profitability. a for quarter revenue decrease the Revenue increased in net XX%. retail increased year. from in fleet stores, EMEA and XXX of XXX%. increasing of X a Asia ended XXX% prior The Kors with a

expansion total by Versace improvement at margin We with XX a performance. margin retail This brands, Now, increases looking performance company Choo, were three versus pleased driven year across and material all better-than-anticipated including points. gross the prior at strategic channel reflected basis of initiative. in Jimmy

double an generated in increased as percent an anticipated, increase gross was approximately million basis, resulting On increased prior in leverage. as expense margin revenue, higher Michael expenses. significant XX.X%, approximately a higher expense penetration However, operating of wholesale better Kors year absolute than as reflecting prior in for was year, quarter. $XXX primarily versus overall Operating revenue levels, in the which expectations lower our resulted variable revenues expense the

the recover reflected in the our well sales as Additionally, unfavorable as of increase foreign business currency reinvestments exchange impact rate. as

All expectations. As above and operating margin XX%. of total was of XX.X%. result lower a leverage. Choo, margin Michael our expense Kors percent expectations, also at exceeded and XX.X% both, operating was operating expense margins operating was margin brands’ better margin reflecting gross margins our gross Jimmy and operating revenue, At was a company margin X.X%, of Versace, At operating as higher operating

billion, at the of balance quarter $XXX of We was approximately million sheet. of debt billion. turning cash debt of with Total in net end $X.X ended billion. and $X the to our liquidity resulting the Now, $X.X quarter

compared Looking at to quarter the $XXX year. we ended with XX% inventory, down prior million,

we the forward, to of sales over expect growth support year. build to Going inventory remainder the

additional shares first quarter, worth and of repurchase have $XXX the availability an million of During share remaining authorization. million under repurchased $XX approximately our we

guidance. to turning Now,

some Before take a detail, our going year moment like would to to outlook. perspective I full into around provide

higher-than-expected primarily year, regions impact to of about and regional though closures and the as we balance increasing cautiously the certain We revenue store even reflect are seeing some pandemic remain quarter guidance first quarter. the sales optimistic the stronger the the results continues anticipated restrictions are We second in world. our of to

In delays closures. at addition, we are due increased experiencing merchandise challenges in factory and level receiving temporary the to

the However, year. the incorporated current for outlook in situation our is

revenue approximately Kors Jimmy We Capri of full approximately approximately $X.XXX approximately guidance. at of XXXX Holdings revenue $X.X looking This million Michael Now billion. forecast revenue $X.XXX billion, year assumes fiscal revenue and Choo $XXX Versace of billion. of

guidance includes week. XXrd As reminder, million a with associated $XX approximately

we of as of margin, gross first prior quarter basis of an expansion reflects expansion gross well This for points. the our results points now increase stronger quarter despite expect as approximately For in basis costs. higher increase from transportation year, XXX XX the guidance margin year, each

to continue reflects by operating quarter, remainder the offset the lower-than-anticipated investments expenses forecast first of $X.X in This expense additional billion. in approximately of We the year.

As future we million approximately reinvesting to important e-commerce Day, $XX growth build and support initiatives. we and million regional fiscal discussed our during believe growth to Investor is in it be marketing, momentum XXXX. $XX Therefore, our will into recent

now of guidance. margin XXX of approximately points increase an result, operating prior expect XX%, an relative basis a As to we our

Versace, an range. in we For anticipate margin the operating low-double-digit

range. operating range. For the Jimmy in Choo, we And margin Michael we for in an margin the anticipate mid-XX% negative Kors, expect low-single-digit an operating

items. We rate of XXX an of and anticipate XX% average outstanding Turning now shares interest net tax expense to approximately weighted million. of our certain million, expectations effective around non-operating $X approximately

approximately of for share diluted to $X.XX result, a As XXXX. per we expect now generate earnings fiscal

quarter second to Turning our guidance.

prior Versace million, revenue approximately million, and $XXX anticipate company margin now We expect as increase of This XX operating leverage XXX an revenue We in our points higher basis-point increase of our revenue as year, will reflects gross revenue approximately forecast. billion. of Jimmy approximately Michael of approximately approximately revenue basis $X.XX $XXX quarter of to XX%, Kors well $XXX a on be total last versus our relative forecast second for We guidance. margin million. Choo expense

an now Versace, the low-double-digit For range. margin we anticipate in operating

expect For we range. the margin Michael an And negative anticipate Jimmy operating in margin now in operating low-XX% range. the to continue for Kors, Choo, an we low-double-digit

million. our to items. is forecast Turning approximately around $X be expectations non-operating expense certain Interest to

approximately million. Our effective be of expected shares tax weighted XXX to rate outstanding is average forecast And XX%. we

earnings share are execution approximately our conclusion, of fashion of we with In a business. now diluted results luxury initiatives. and strategic our reflects expect houses quarter per As of the performance $X.XX. first our of result, This our the strength we pleased momentum and

world the well Capri we As increased per deliver remain and the Holdings to emerges as positioned growth from share of that pandemic, earnings years is as shareholder revenue confident value. multiple

we will for questions. Now, up the open line

Operator

with Instructions] Evercore question [Operator is Our ISI. Saad Omar first from

Omar Saad

seeing it the back the heels morning. strength. strength the customer you I Excellent Congratulations. La taking job, kind product talk sort Good or heel wholesale -- response you Choo, Did signature follow fronts. up marketplace on of customer Choo side? Thanks. with Greca for really wanted response Thank is you’re question. guys also and Versace all sneakers I or on and the print? pretty product wondering strength is shifting of about heel to response, the my And was much towards any on

John Idol

a over today’s spectacular. Versace, little the you, you month I joining Thank flagship from we might have way, a for just By opened call I’m which our is ago brand-new Omar. morning, France, Paris, say good for where world and

to both Versace. see first, exciting answer here to questions, So, it’s your to on quite of that. Omar, be

our strong And in the selling we seeing we coming across remarks, first, Barocco new As we’re it’s the only anticipated. it’s which accessories really that products much some of that introduced, than two is footwear, prepared momentum belts ready-to-wear in the categories. our accessories is had Virtus, collections quicker really we discussed but earlier and on V, not the -- really in

pushing and very success this new huge right frankly, with stores now. icon initial was having expectations. really La design, it with collection, And she really a days quite that been, And which puts the has that in obviously has the trouble back takes our then, early So, Company. our demand in from collection right far that Medusa forefront. exceeded frankly, we’re keeping real the for Donatella quite And came Medusa up

some belts we’re that So, seeing that’s, a other resonate shirts guess, have. good product and again, across degree, categories. I to to men’s and problem And

overall anticipated Greca again, So, something pillar up La -- us. we we’re signature Greca, is really for we’ve our signature having Greca landed with to the the ever quite in that with sneakers keeping And even the pleased before position to sneaker in La trouble be La now, and which are Trigreca now. both not right on which pattern, is demand, of

kind kind is And customer, cornerstone of also we’ve fashion which important extraordinary, against that you seeing La we And told competitors And our you a can the customer of to over Greca core launch and channel because have place have but can gross of were a you, an and pleased large really of So, our the last past, didn’t the see is very a and products. XX%, grew a think of we’ve importantly, that for database upcoming which those interestingly, with this. maybe products, what those. tremendous XX generate is hoped increases now that we a And is, us as that matter with talk I enough in put pillars in profit. amount business, all which are own October, resonating strong. it full of our top already is good executing a own driven core the revenue these our more news response something again, can call I now we’ll reacted bit in been with you lot to not about have very, there’s about us part, of more And in it’s the think is, rhythm We that. generate teams, to our And resonating where very, really very well, agreed pillars is real of coming has I the strong face the degrees. again, Dua The really most in been today one all million-plus wholesale that were and music with we’ve stores, for La the is the huge the the introducing and is mean, make absolutely powerful. little that with XXX they’re going we’ve to her what has which campaign. Versace be our the Super to by quite younger growing are excited about months. from Versace the the Lipa, around artists large will famous of of XX on following, world. this has fans we’re who And Greca be fact world, the for to going along an our think quite impact be I for.

It’s smaller of you’ll please La happening again, you New a So opened But will so in of new based our a Green thing York, Two September. together Jimmy you the in I see flagship Jimmy whole And there. and here. which pleased Choo: few -- just to at course, Street I this Greca things ago. are we’re are right Choo. call -- really weeks come hope see be version go there on some of store, of most our

to socializing, return seen we’ve a States. in the United obviously, First,

the Choo during entire closures. really The We’re see a with We’ve balance the a been starting China bit is that of all on for Company’s pandemic. of brands strong very, Asia challenged Europe. to run Jimmy just of because in very in

dress of -- going it’s away So, dress And engaging business, really socially really that’s people seen the around very, where work business occur strong. for has big people the holidays. a very parties, business go-to around reopenings things strong part bounced not Choo. the we’ve really for and is another, casual the would with bridal more lastly, quite it’s say us. but one for Jimmy resuming, summertime, on then And especially I back

talked Choo. our -- talented end that a individuals now is handbags product be about lot was of from introduction are XXX%. who I’ve to luxury inroads, groups we’re And which, to of really and will want made coming. we we’ve accessories which our that. part too, about in a in really be other We’ve our have coming been we’re as just really feeling Again, the the that growth, quite casual So, the side, on sneakers strength with from a good business, particular We has But spring core Jimmy starting commented of new resonate. up for that. we’re the has have before, demand spectacular. our of our how hired to groups about place Company. the coming huge the not one the a taken with be. And really little I major our is keeping quite and hold. the high DIAMOND most to some Plus, guess, franchise, But, really category. difficulty I high one new Monogram designing good that’s Again, which on degree, on that having is a will learning we Again, JC

beyond. business. for there really Choo And think I with product arsenal to our think we So, the will and be fall a start Jimmy that in have starting lot accelerating I

you, Omar. thank So,

Operator

question next proceed. Please Greenberger Kimberly with Morgan from Our Stanley. is

Kimberly Greenberger

for was I It but in guidance quarter. to back, you’ve of a your today historical the in reduced levels. just overview. Great. Tom. the inflection it morning for this Tom, And so here great real are you’re thanks talk Thanks beat wondering, know the that obviously seeing? much. and wholesale sort much questions can I’m margin My better is about performance gross you compared the coming notable

that you reposition you got brand? to impact? any a dive you basically the to And more? into Are shipping can those, So, the of and talk got that headwinds factory about you’re that be delays the wholesale on Maybe are sort any on And well. Thanks. that visibility can some little purposefully that timing currently you’ve you’re just encountering. bit would you delays from just as you’ve if seeing great the suppressing exposure of seeing the

Tom Edwards

Thank for those Kimberly. you Thank Sure, you. questions.

John Idol

to say Kimberly, quarter, to led really be want over in growth thing the first great one before you the I turn I retail. performance at just it the Tom. was by me Let clear, just

that. just I you to So, want know

but this America, in Tom’s is second actually to in business, sell-throughs excellent. your our very positively. in The quarter, rates very, full North business the think are which not that because happened -- the of at wholesale thing the wholesale piece price our is color has the we’re running Still commentary, business, seeing I that rebounded will add biggest the

see. We’re is you have seeing stores tell -- really consumers into I which department to stores, the into return exciting the to

that So, in I but the department to it’s are stores. absolutely our in people just happening want just not you to retail feel color get for stores, returning a shopping

Tom. Sorry, ahead. Go

Tom Edwards

gross And the margin, John. driven price looking Thanks, Kimberly, was was all really it full it’s above And sell-through. Wholesale also expectations. about retail. by at

prior really look look all Choo that being So, we year, out. When performance the pricing the some well better at signature have saw higher more Kors it past despite a at the portion be -- the was and brands great price business, and as that transportation we where larger that’s a was in Michael than seen smaller at want and of Jimmy said and wholesale already accessories, with And at Jimmy When Choo we penetration full we that Michael XX% wholesale, to at coming margin we and sell-through costs. expansion mix the across profitable. Kors. And we were we’re business Versace in as higher we’ve was gross year.

to We expect be that similar.

that a a that smaller of quarter, was being first half, in of off second very off that’s And in line we base, expect base but with off more in impacted strategy. by COVID, grow the to to going is saw growth we smaller wholesale our profitable. So, the level low

and receipts asked of about closures. had delays factory You

the are the really that prepared remarks, forecast. current built in but noted As is delays, seeing we into

situation the anticipated continue. we’ve will So,

our it We grow gross expecting And built the to we’re margin year. that, line this expectations. into have quarter despite on still every margin

Kimberly Greenberger

Great color. you Thank much. so

Operator

Our Ike Boruchow next Please Wells from question proceed. is Fargo.

Irwin Boruchow

you’ve on expansion understandable Just And as Tom, the margin, give Could seen my on decline relative kind color relative where to Great stick years the morning. gross Kors, two John, just Good mix. Hey. then, how ‘XX? quick curious with to add fiscal you so follow-up. let just of some the on And maybe sit the us job, much does guys. maybe a to congrats. gross me in ago? margin channel

such Analyst potential start details outlook year year. an the to the your this Thank next fiscal Day upside now come there’s you for in area next most if to seeing you. business the where already You the mean, a number $X some say just for I curious, from? you’re to year. for right at Can on I’m that robust gave model

Tom Edwards

and our into and tightly Kors drive increase SKUs drive that’s continuing When Signature look Sure. through that then lower actions, pricing line. particularly to price year. managing more sell-throughs. in to and occur It’s coming a Mike, management at and to I’ll gross is year next that inventory ago, as look accessories product And of to we been really full couple above talking the we’ve will the the years margins continue where margin those was due fruition. take world. pre-COVID Michael significantly first part. we initiatives it about And in versus to that

ahead historically where the line. we on well So, of gross were margin

John Idol

on call. like thing Yes. And this everyone I’d for add to just one

this time our I business mentioned we’ve for the focused LLY, and ago. business. the some and are expectations not With Michael think what Kors, we reset are because really on we

that prior many wholesale -- And it is stretch LLY, variant. might Southeast virus Australia a this not we add call full going looking spreading to of when situations Delta be the it’s hard back and I on Asia trying that of there’s at we’re year when the to know by And to unfortunately, in Europe, which are any even imagination are levels. the So, you and still we’re comparing have business. Japan and also smaller

Europe we think some North China, across And of have that would down had America our we’ve will seen. we slow we as strength in than quickly as liked rebounding expectations on around probably the seen. see growth hand, quicker the again so, much have see other entire group. going I where double-digit we’ve strong to But And

focused takes and through as to we’re puts years of we go But again, Michael you, be just were we ago. two kind remind this. on want I to going there’s not where So, Kors,

some our focused grow full businesses, and as talked only business, in accessories categories, a that’s see expectations, to about strategies, we we growing focused growing not in ready-to-wear accessories. long-term We’re our price on really just of on opportunity where profitable more sell-throughs our way men’s

feel second standpoint. seeing Michael we’re in point I our from as for think different his that to of the XXXX, Ike, the too continued Tom Kors going fiscal us relates the to early is first in mentioned And prepared ahead quarter. complexion it year So, strength to Obviously, remarks, expectations. of that. that’s to was quarter well

not think some the again, we’ve if on the quite as that there world. to is feel bit the are make smaller see did the over of to and consumers from got half know, we really to we clear. Choo, And you But we its that we were we our some or decide recovery. feared we never even to strategies look as Versace the year, On around -- restrictions, Delta the Kors world went this COVID. with things brand kind Michael our with through moves focused. and Jimmy X And X, next closures more resonating optimistic change talked we We of as think think a strategies are did achieve. of we about bumps We economies and through how quite at our back products are what trying brand months, more that X, way the just

the for results I kind think well think it are I speaking So, bodes themselves. future. And for of the all

for So, thank the Ike. you question,

Operator

is question with from Our Matthew Boss next Morgan. JP

Matthew Boss

great a on congrats and quarter. Thanks

or improvement digital question. as larger John, that really you today, quarter? operating relative assumptions the prior, margin have maybe year operating today’s bridge is On between Tom, the two-part to at for So, changed forecast as And XX% this XX% second and about margin, then, first all back think half really we the to the where in behavior optimistic and guess, before? think brick-and-mortar relative pandemic most picture, you reopens, on we the world the customer the then maybe sequential brand are across changes continued strength we’re after portfolio seeing about as the at I

Tom Edwards

the saw looking as factors. guidance that I and of some we the year, and It in of from we’re of And question. we thanks to When delivery XX%, the over part the look really pleased expenses Matt, really our at operating margin the quarter. is reinvesting XX%, year. at at back increase QX the in half of a combination the the benefits it’s look we’re QX the lower that we prior to spending, it first going for in lower would back say quarter into of

reinvest $XX $XX drive business in to want momentum to we ‘XX. million that and build continue to order into million year about that’s and the to us So position further fiscal

think I this is So, a that balance.

we’re growth. to want but We’re the very make right longer-term achieve our to pleased to sure doing things to business support also be the increasing guidance, that

growth We’re double-digit deliver of longer over per revenue growth expected a earnings share to mid-teens period time. and

John Idol

Good morning, Matt.

we And by great the in into So, dovetails growing to great question is about of way, the you that few to we for what’s basically business. rapidly, Obviously, fuel is continue really the to now. the get which every money spend things. Tom’s remarks And asked, e-commerce region that business just us world. a want

we customer drive off, First engagement.

data growth think Secondly, as we’ve our team working way sophisticated we the analytics and to got customer that’s drive we’re databases. with said. engagement, I working and a fairly we that our build And

something to got on all is we how a from brands we accessories that’s can good these we $X -- I even and as three a that, we’ve And really e-commerce have of the can do pretty were for so realistic prepared room we remarks, grow. number. And to that grow billion. of idea think, feeling good look able All a today Versace, I And and have that. penetration at if much of the our in said channel we where Versace, too, that in very my is,

Choo, our have our business casual at in those percentages huge and drive footwear accessories capabilities. where categories footwear business. opportunity also our be in very So, thing, we could really us. Michael of for that Kors, a bigger and Jimmy online, can and ready-to-wear our At particular, same we And much profitable

omni investments I and a we from over good We So, feel we’ve from capabilities years. digital good the our standpoint. think our made few last about feel standpoint about an those capabilities

that. with of terms faster. On make investments happening see wish little lot what of to happy all around brick-and-mortar, would what we pleased in things North we’re traffic, a we continuing America Again, China. a we in with go Europe, happening see We’re in also

allowing to up Europe and move to to country -- going open be new countries people that’s We’re just passport how to the going how depend and green works country. on for really

that traffic North the optimistic brick-and-mortar of same I’d in on So, seeing Thanks, say, but America. the optimistic lift part cautiously business. we’ll see of Matt. Hopefully, have kind Europe actual we’re we’re

Operator

is America. of Our next question from with proceed. Bank Please Lorraine Hutchinson

Lorraine Hutchinson

-- ask little a to up to reinvestments. bit wanted on just the I follow

that you being Day like about But, to lot enough sounds the have do in reinvesting you think a for doing spoken the store rest campaigns any about upside base that have or of year. terms the of should marketing, you’re good planned you further feel upside And the You’ve the a it openings, the any it. marketing. year, reinvested at the remainder about for Analyst think some sales like we the continue as into we of of

John Idol

our obviously think Well, pleased share growth per very growth, we’re et earnings growth, with revenue operating margin cetera. Lorraine, our I and

the think through. new next might over for Company. see don’t the don’t desperate it the we quarters, would to have marketing beyond brand more we if on And initiatives XX% need I truthfully, absolute flow So, again this significant expand all know guidance. saw revenue few I we a building spend that and XXX% overall margin and operating other We upside

that projections, for billion -- our When I Things and to over said come at you look beyond at going even Choo. continue do this with build to I’ve at going picking Versace that. think looking Company, year. $X that to things to is house. at And our when luxury to to which for this do is we good there’s you what are Jimmy do more really look over we Day, XXXX, billion $X Investor XXXX, want are to up we’re

right to that continue we business, to the flow So, in across think you’ll for now. line. if group, we’ve bottom continue see the that to don’t see that’s hopefully, some think I And your smart grow our sell-throughs And absolute to our you invest to the I thing that’s seen type need of But, also us business. do. hopefully, priority to of the

three $X look a make plus into that two billion bigger that front will of in to is as than margins Lorraine. something, bases, sure it. in as operating so all out the and Our are luxury Thank to we’ll And you, houses we the that be of these absolute number priority looking we’ve long-term building at much have of stronger said, hopefully future, terms continue revenue. stronger

Operator

Our with Citigroup. question Paul Lejuez from is next

Tracy Kogan

XQ. was currently seeing It’s Paul. I Tracy Kogan in filling in you’re wondering what for

You down were versus are which is guiding think two I XQ. years deceleration a strong, in XX% quarter versus you two ago, you big the mentioned but revenues what pretty saw

you’re what seeing things wondering if that just quarter progresses? now to, if is you’re assuming you’re So guiding Thanks. the moderate just what as or

John Idol

down. shut most to go the going I’m by Tracy, that. remember, you Tom QX, can’t of happened let world touch on in QX. was But what completely

starting major I one Europe think open. So, lockdowns. the Again, I were closed. under be Most to think lockdown performances is we QX, up -- against the think I had is results, group either be and have Australia we’ve is closures. luxury stores while not of of proud, or Southeast we’re may that there’s extremely of transacting a some open, by globally cautious. very business Japan best Asia while, we is little there.

international while nicely, our still North some America robust, as moving we’ve We in And with. to other got really said very have issues deal remarks, is businesses. we’ve is big China and ahead

the like of point start do the good consumer you in a we’re I from way But, at quarter, to product to houses. to need But we the Tom, our be so, we is the we responding three same all said, very and to off as the luxury think And time, in comment? want cautious.

Tom Edwards

that Kors, progress. up to at planning we’re mentioned planning business our evaluate that fluctuations QX. more appropriate little the a John really Tracy, And profitable lot forecast benchmark hard reiterate more a be and smaller having to Kors, are reset refer these Sure. but to lower. was earlier Michael particular, really business. And with and the versus course, in because just already wholesale, our quarterly objectives a Michael look I’d And we strategies believe for is And and do LLY for in wholesale of of something

improve look and variations at we it expect retail, driven. a really across When QX. retail to to sequential the that basis in houses, in trend we wholesale continues on our So, continue are

John Idol

we promised per last some time and pre-pandemic fiscal ago ‘XX, thing, share. be one in earnings above Tracy, that And we revenue pre-pandemic would above

going we’re the share On to side, be earnings per of ahead original our expectations.

more shareholders. revenues going So, to to with we’re we and our leverage. create some profitability, increase, our spend the with exciting as we’ve leverage. of create marketing. you, -- to we’re for our to going pleased got for and you Thank that whatnot, lot a on really that’s But as a go we lot runway ‘XX of to Tracy. group we’re profitability. think because and can we Obviously, going understand as Yes, we’re And going get into be that

Operator

next Simeon with Capital proceed. is Markets. question BMO Please Our from Siegel

Simeon Siegel

you. the the can how Could and this on you do maybe nice year? that share to say landscape the then into over AUR see any results. will perspective over Congrats And the lack promotional point now think broader holiday? that on just us quarter? Hey licensing was where about really color about you did the you strength, just quarter broader your talk in to you jewelry how John, look going and then you Thank

John Idol

situation. and years full well, a around is discounting -- performance American I that walk that competitive to to got that And commitment. we from gross don’t promotional price decision going it’s in And were we we more activity. was around you’re that to situation think Sure. we’ve every think, activity made margin what really of two trying seeing -- did. we we’ve environment just away Thanks, Really I I almost ago of only morning. chase back kind good just Simeon Simeon, know, the stayed firm North it a going certain but considerably less know not sell-through,

a to have is don’t inventory that. We which issue. do huge the Second,

for right do not It’s don’t everyone And to hearing the doesn’t can the so, matter. keep -- up. if come question our We to I it. because it. this It inventory competitors going question do I answer have care I now, don’t

only the anymore. do to So, just not it we’re going it happen. And And we direction. don’t want opposite won’t that,

we’re next that are mentioned to on prices Kors. As year, we’ve going raise Michael Jimmy about go And Choo, in by season previous on also spring as again up for I going well. our talked raising we’re you’ve And considerably. prices call, heard, prices to the way,

flowing I I don’t it’s hope So, the don’t door of we’re -- conversation waiting today again. I won’t is where us, because that and to opposite positioned. everyone given And the I kind going for brand I That think that product, can our on is close given purchased we we’ve happen think happen where think the for product direction. know is -- way

We’re going up, not down.

can last on jewelry, what’s that that’s at America new all And same clarity North flagship topic. in here a jewelry. So, definitely brand-new our thing in shocked I’m I’m in in and really say It’s Watches call. the commented Paris. sorry. about to happened It’s store Watches customer. is, I hearing and that Wow. wow. we’re I our

what in that’s It’s in strong. a globally. a -- more accessories, younger jewelry a that’s our So, business the which is exited really finding is Michael who business, and line, are really And customer business. elevated, jewelry are more Kors expensive all signature watches more what more discovered to kind globally. finding particular, result really expensive. watch -- well the And we’re product they’re as really It’s lot very, -- almost watches that we And almost bold through of probably you is our has And new generation of we and be really, business fashion driving our Kors. sterling new silver brand. ones we’re very to And really selling our very aware, who us. to of the a them, a interestingly, Michael very, are doing went consider

partners both the around some at wholesale and own stores got our finally on we’ve our business, nice world. So, that traction in

last to thank partners Fossil. just for I for things at want the group, significantly. licensing going I’ll So, revenues us. are thing mention up our And come good And is, were very to

have an the businesses have EuroItalia Versace before, one in job. largest with of I’ve the and partners As fragrance commented amazing done we at world our

And above new our fragrance launch business LLY. Our is -- pillar. business I the our new really know, is XX% Michael don’t Kors, up, the of in same with XX%,

things us to we’re and that so on really clicking Thank all for much, And Simeon. pleased our see are license a business, on basis. very global you

Operator

Our next question Sandler. from is proceed. with Erinn Murphy Piper Please

Erinn Murphy

on just at follow and is John. not Versace EBIT, but wanted profile. historically the I to already XX% biggest margin you’re on the up June quarter, specifically

you’re So, know early building curious been long-term XX% accessories. across how thinking so but clearly about platform the pretty there’s you’re given guide, any robust particularly how if the has there. a Thanks I changes robust of it’s demand days, much.

John Idol

of and question, I asking question Akeroyd, kind And just you obviously. competitors left Paris. look, XX% the and asked our We does. Erinn, that prepared strong because I’m for be are here know CEO, our we ourselves XX% Well, that operating we it. know what were competition everyone not surprised Jonathan we in And, margin. between knew really we that ask would question,

the on mentioned will higher our I’ve Day, one revenues biggest is at that flagship As believe, Versace leverage Investor our of I in create stores. things

amount half shows do right we stores our you X at We don’t need per our of times foot to the And probably runway go much business and space, That we every dollars know of We still build you be have really not square the how in one bigger. have of to locations, of the could numbers our Versace. right literally competition. competitors. the we have more

XXX. tight going we a We’ll again, a so be time, today, to get store have over that’s little but XXX base to very And over tight. super

I productivity. We’re thought. productivity, we’re on to the looking And we moving -- we pleased that want than And we’re don’t profitability. accessories say we’re that at surprised, much presently drive we quicker drive we’re again, as will

going to we presented got So, at yes, Investor if than like I on we’ve be obvious our this, move we’re Day. thought quicker again, But, cautious. we continues answer think, that and to, what is the that

Well, very lift back business We’re very, is to big And for see we’ve consumers the the again got big here. margins Versace into not Europe, in the a a stores see out operating that, you’re when still and Versace. that’s very Europe. of in not we in to woods. case get going

or XX% a Versace. path it’s much to to say that need we’re then last see Thank great we’ll going you question La confident the quicker to into much, clicks, more definitely over asked. it’s see how we’re XX does for be in So, you, we I and -- I and to whether not, it can’t think be margin get that stores, the it think And days. does. we’ll seeing it operating Greca And a I But really races. Erinn. the again, off if but gets

Operator

our of remarks. for management to We closing have conference over reached session. I turn would the back the like end to question-and-answer

John Idol

call. thank I quarter around employees all you I our you want to would first to the importantly of say on joining management all most earnings world. for and thank our to like today us

And would that we’re a work the all not achieving we Our direct that the without energy and results success be of are hard put today. them, they’ve reflection of forth. having

in thank thank want to to everyone I joining like particular. So, safe. us today. for I’d else Stay And them

Operator

Thank today’s does you. conference. conclude This

this your your may at for time. you You lines participation. And disconnect thank

Capri Holdings Limited (CPRI) 30 Jul 212022 Q1 Earnings call transcript