CPRI - Earnings call transcript Q3 2022

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Operator

Hello, and welcome to the Capri Holdings Third Quarter Fiscal 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jennifer Davis. Please go ahead.

Jennifer Davis

thank Quarter joining Fiscal and Holdings on everyone, Third Limited XXXX morning, you us for Capri Good Conference Call. morning Executive Kors, this John Officer, Tom Financial me are Chief Operating and With Executive and Idol; Chief Chief Schulman; Officer Josh Michael Edwards. of and Chief Chairman Officer,

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

will be all reconciliation, a earnings view on information noted, call on ERP to our and today's charges. posted To implementation at release financial otherwise non-GAAP transformation a costs charges, impairments, information asset In please measures today basis. These restructuring and long-lived the costs, will associated with capriholdings.com. measures presented financial GAAP the corresponding presented related view certain non-GAAP earlier website be discussed costs, addition, exclude non-GAAP Unless basis. COVID-XX-related certain today other on Capri

like our update call we'd an we begin, to an after earnings outlook. fourth our we Before XXXX Day be long-term on to fiscal announce will holding quarter Investor provide

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

John Idol

Jennifer. you, everyone. Good Thank morning,

with consumers robust our pleased of ongoing consumers encouraged significantly added employees hard a be strength all Kors testament from fashion last execute over and the as as the Capri dedication holiday by Versace, as as Kors. new the million databases the of luxury I that holiday of Versace, these restrictions resonate of our regional Holdings' I'm our across and our with extremely results. We Sales results houses' well initiatives. supply strong continue we work to Choi Jimmy growth ongoing results, Michael Choo trends responded offerings to am product world. our the challenges. Donatella around including brands XX.X our were pandemic, headwinds are chain continue momentum Capri to the able as strategic pleased compelling year. navigating and to Holdings expectations with we each especially while to consumers exceeded Sandra the deliver by against Michael associated the evidenced and

Looking world we of recover forward, the our pandemic, remain impact global in from future as confident the the growth to continues potential.

results. quarter Total acceleration Gross above second exceeded share increased of results the greater-than-anticipated We sequential reflecting X-year quarter third expectations. to all a to chain better-than-anticipated margin on to both our and relative XX.X% with even margin a continued supply at Operating earnings was expand revenue, XX%, margin our expectations. cost. were X- basis. operating and all per pleased brands. turning Now that X revenue represents This

better As a anticipated. $X.XX result, of earnings was per share than

revenue momentum Korea restrictions increased trends closings, declined in store domestic in revenue by X%, group international Japan, reflecting all to not In trends consumer across China, region and strong revenue improving houses, robust This XX% due select certain at tourism growth even recovered. was expectations in driven was partially has Mainland city Asia. by not for countries. if been travel with [indiscernible] expectations, increased our Southeast significantly Asia, In the The offset EMEA, and as yet trends increased demand where lockdowns. in would inventory and Looking increasing have by the geography, greater revenue despite our also restrictions exceed constraints. above XX%,

Versace of third to demonstrating performance brand our growth all the starting the turning the momentum jewelry. of strength expectations increased statement Runway styles off which footwear with success We across Versace. Revenue the to runway by as the strategic brand, pairing look quarter our and XX%, Greca, significantly categories luxurious brand Results accessories, once with our very brand latest product a is strong by styles again. the exceeded new La initiatives. emphasized and featured Now code, start. saw

of code itself for accounted across new XX% Our a anchored product sales pillar and signature categories. all as

Retail component key of nearly to which prior accessories, Turning strategy. versus doubled sales our are a growth year.

saw X our of La Greca Virtus. strength all we across Importantly, and pillars: Medusa, La

are over significant time. to our iconic to place, accessories now X in making pillars goal revenue progress expand in the we billion With $X

are ongoing confident sales Footwear house. the as on offering and with Versace build men's digits well, we in in and luxury as a women's leather a also Greca iconic leading a to Labyrinth our ability our women's response ever as perform new also luxury sneakers footwear we at well brand featuring continued trainer the Greca than La styles chunky core authority to more focused as In Men's to We sole. women's Greca to third gain well fashion double our Trigreca increased continued codes. strength quarter, strong footwear. as in performed position positive retail pattern

up Greca men's new were pattern. in response positive La ready-to-wear, We women's pleased Additionally, signature we with the digits. especially sales saw double strength with the to and retail

to expand We to sales also core we codes our house lines, which incorporate reach. Versace's as drive continued broaden iconic

and brand localized consumer the launched campaigns Now October, in Asia in Versace brand In the engagement. as awareness its X emphasis region. increased turning to

singer over accounts. media and first in social followers million brand featuring ambassador, her on The was has The our China, XX Wu. Betty actress Chinese

a The as the Greca maze La communication in featuring Seino. signature vertical Greca pattern and by actress, Japanese model is Nana The our with XXX-degree focused the second iconic inspired Japan, on backdrop. was motif

opened designed and The shops China. iconic portray were season's in pop-ups pop-up new signature Additionally, during featured quarter, the cities Greca key the products. Versace immerse to throughout motif the

pillars the Greca new La in sports, consumers and top-performing Versace's and date, to bold was of featured The showcased styles brand La initiatives, with key powerful Medusa, among ideas. in to Versace's ability celebration Virtus, fashion. gift in the This strong very generating revenue. winter engagement, in confidence holiday campaign to tremendous global glamorous For drive speak year-over-year house holiday Versace database. to increase a These strength results and in XX% $X the third of Versace's grow reinforced the revenues. billion our quarter to Overall, our least helped brand others, at house campaign

in Greca, of place launch we the building potential With realize the this to key powerful blocks of have full the now La brand.

optimistic ever more about future than are growth opportunity. We Versace's

our to were expectations, Moving our initiatives. ahead to significantly as execute increasing revenue strategic of against with Choo. XX% Results we Jimmy continue

grounded accessories, and embellishments. people standout Evening Footwear increased Our Bon pearls as every recovery progress also enjoyed well, third from focus and the Choo key the special to in quarter, performed glamorous crystal holidays. reinforcing Bon. on day, and slippers styles delicate double styles boots In a also with revenue social VARENNE, brand's dress our across DNA well. anywhere we very jeweled with across accessories do. shearling digits crystals with embellished strategy in sales performed celebrated occasions embellishment and families: we in footwear bags accents is Madeline Jimmy casual to footwear. combat the formal handbag engaged driven overarching continued as X double anytime in Casual and our by with from activities, everything were epitomizes strong Accessories digits. quarter the by increased hero sales and driven pleased glamor were

see We continue Memphis consumer new positive to in to growth with reaction our sneakers trainer.

in fashion Stars interpretation incredibly by turning collection Haze glamor. The with launched limited Japanese collection Choo to West brand awareness an high In Poggy. consumer successful modern edition of icon, street engagement. Now York-based New fused and collaboration curated with Chasing a and offering artist, East Eric October, Jimmy with fashion culture, and

with items media of to collectible physical co-branded and Chinese Victoria by these excitement. the collectibles and brand pop-up shops launching capsule at Numerous sold million helped events celebrities, featured out capsule, accounts [indiscernible] melded views. XX influencers within Post events over the accessories, hour the Asia. world bare-brick attended the store of and celebrity boutiques #jimmychoo/erichaze In takeover apparel, in and Choo to The gained life, virtual. social collectibles, generating the footwear including Jimmy and figures, ambassador, X online. NFTs Song, fashion To of held bring pioneering NFTs products addition collaboration

from is of the continuation consumer again once Hailey as our Hailey statement. the campaign of to top holiday, accessories world celebrating A and the in Hailey featured return Dare Time of who embodiment to modern were campaign footwear Choo. to communication shined the on Bieber, a created Autumn the campaign, glamour living For that defines once night, of Jimmy she dares. that The make again is glamor the life transitions day Bieber

quarter Jimmy Overall, potential. the a to in margin with growth the and consumer expansion product our increase future combined database. growth Choo's house's global glamorous contribute marketing, Jimmy confidence engaging reinforces strong in Our in third XX% operating Choo's year-over-year revenue helped luxury

are encouraged over towards We $X Choo we at time. to progress billion are Jimmy our goal of the growing by making revenue

to we elevate brand. Now as and continue increasing to product Kors. ahead of turning with Results revenues XX% were our expectations, Michael our also our

Legacy global to grow high teens will increased a look collection AURs prior quarter, believe Accessories even Signature details, will for in quarter, modern-meets-classic In versus Signature last core techniques, the During the including to our channel the Carley Kors Hamilton in compared color-pop double the penetration we and logo, e-collections to year. and sales a season the to higher digits and signature Greenwich infused XX% Shoulder assortment eventually of XX% holiday, for overall is pleated assortments, a drive AURs greater. Accessories, studs In Chain Crossbody, which represented appeal. continue product approximately logo XX% new of Satchel. strategy, margins. updates growth overall and with and year. our increased globally, Soho Signature was penetration the taping remains Satchel, the high-shine responded as as retail novelty fresh consumers such diagonal

to branding Moving ready-to-wear, performers. in in logo Fashion saw updates and combinations. styles booties, detail. perform elements Similarly, signature featuring top and iconic active boots to continued were signature driven footwear. featuring color strong seasonal also women's by among Signature We well, performance the

remains strong quarter exceptionally fashion categories Men's signature outerwear. We strongest retail, opportunity led about well. in consumer was also expand saw small performing to accessories our product and by we Growth gifting, the a the goods and to performing in backpacks, enthusiastic of with third leather collection. one outerwear remain the response

October, film, Kors Bond James In engagement. Die. consumer No and franchise first brand's Michael awareness partnership brand with partnered Time to the collaboration film in the with to global turning launch To Now the

hosted of collaboration collection, we Iceland; in series debut the Rakievich, around Florida; each showcase trips Bond-inspired world. and the in Island Miami, For to of the Hainan global own highlights. getaways China capsule a their destinations Action-packed glamorous

video billion at XXX Bond million The the X.X across from the had hashtag each emerge Combined, as took FeiFei XX Bond views to challenge to went new collaboration X.X in guests Hainan TikTok a and key TikTok our Island trip water spirited guests generated Globally, destination viral, these included videos. and Additionally, over challenge their part ambassador, in style. million XX influencers followers prominent Wang for brand influencers. such media social platforms. Chinese other hosting

embodied optimism they of Signature Kors' captured For ring spend the glamour to the Set together. as The holiday, of season. communication York the in holidays Year Hadid Michael consumer and and New New campaign glamour the and the easy with friends joy journey sheet to City our infused Bella and Jet

to desirability database, This Kors to Michael year-over-year Kors' Set continued brand and marketing energy our XX% of pillars Our and Jet optimism. Michael demonstrating initiatives strength brand. a speed, global the of in continue the increase contribute helped underpin

we I'd take consumer the growth which career. strategies achievements we place and impressive winning younger of Michael moment future celebrated XX-year the Finally, Kors. the extremely Designer have long demand the congratulate Overall, The has as to as Award, are of prior of he like Year In-style attracting through notable for put generating consumers. about strong pandemic course his the had Michael, to well a to optimistic been the new in

pressures. we improvement expectations we revenue Additionally, pandemic sequential third in chain and our positioning. higher In as with are supply the results elevate brand driving despite further total, trends to quarter continue exceeded profitability a Holdings' the Capri

Our the of houses The dedication our and execution growth. Holdings fashion hard luxury strategic the the accelerate years power of our brands, work initiatives and revenue strength of performance deliver demonstrates across to the multiple of our teams iconic earnings Capri position X our and of globe. founder-led

us to over like call and delighted on of of Capri to Schulman, joining I'm have earnings CEO Kors Michael turn first to Now quarterly CEO Capri Holdings. with call future the Josh Holdings. Josh I'd his the

Joshua Schulman

Michael work amazing opportunity entire be I'm Michael holiday his teams, had in the John. beautiful with this Kors the with ability the I teams due over our thrilled visit level the the our for X the you, strategic further believe further forward embodies Kors exceptional vision Kors belief reflects performance success and take Michael product tremendous Jet of brand. morning, holiday of brand to foundation the design stores. their Thank future level moment energy and icon, the success building AUR. and including Holdings. on that we with to Good I've Kors joining, years. of team I inspiring, to that I with results In himself, and in to on sharing doing better-than-expected organization potential Its are the to time to and our strong talent have Capri everyone. built have success is Michael large direction fashion to the the The strategic am months vision across strong globe since look positioning the of to Kors his The the a spent growth an the elevating Michael thank at here look we would I period. and the the time the elevate to timeless my of have team opportunity I my capitalize congratulate on spend recognizable increase The styles. capitalizing innovate future outstanding Michael for glamor. our as John, extremely incredible to combined initiatives, Day. the and impressed and team forward the over reinforce the our to is like our and create Investor at Set execution our implement many the revenue across and continue initiatives. I signature of entire fashion part

iconic with own with impressed of the brands heritage, visions Sandra houses, their Capri Each Choi these Looking portfolio Versace, Donatella consumer Kors. am DNA, of Capri unique, and X Holdings, I incredible exclusive led each loyalty. by luxury rich at the with strong is and future Michael and design of and John and for to strong the company voices with confident lead are our fans. the Capri am chapter next to the have I growth look original of figures the Board with through forward potential powerful founders partnering their to communicate growth. in Holdings in

the turn to over call Now Tom. let me

Thomas Edwards

earnings prior was houses. morning, good as and increased our by billion with third our driven share above This you, expectations. rate. results quarter tax luxury better-than-anticipated all Revenue year, Net Performance revenue results. margin reflecting $X.X income our exceeding as everyone. $XXX lower million, resulting of X Thank operating across expectations, diluted a better-than-anticipated was Josh, Starting and per of XX% versus in was $X.XX. well of

in XX% increased prior increased by Versace above net XXX revenue X%. revenue increases in a ended a brand. performance with double-digit increase and and Global in both stores, the X of e-commerce expectation. decrease our year. global and year revenue By to December prior geography, luxury $XXX XX%. to retail from was sales our retail channel in Turning million, sales. XX%, Americas in XX% store Versace with increased EMEA a fleet Revenue total revenue of increased Asia over

Global XX%, Similar By Choo, quarter we last quarter both with mid-teens, and For if Korea $XXX store sales geography, sales. a growth consumer growth e-commerce estimate By revenue a but been had above in retail million, was revenue below Global reflecting over year remains and third both have constraints over increase We increased more in and increased in to Revenue e-commerce our well of retail line XX% and in Michael XX%. available ended Michael prior double-digit increased rate. Southeast Michael retail prior double-digit Jimmy stores, levels, revenue to year, $X.XX impact strategic historic increased the strong total year. in to prior our increase revenue growth At mid-single-digit with in above demand. sales with geography, EMEA Americas revenue Americas a revenue increases business to XX%, a Choo wholesale expectations. increased was revenue Kors' Asia net revenue in EMEA in meet and channel on XX%, sales. store our of the increase decreased channel revenue increased increased our expectations. offset Kors Asia intent Wholesale have would in X global and total smaller quarter, profitability. in XX% year fleet increases even XX%. last XX% Asia, in product in increased with improved in and to a the our greater and a inventory Jimmy billion, declines X%, China. the by Japan, Kors, from Mainland XXX in had

our with net quarter, sales the select travel ended of closings, China During city and a X lockdowns. of restrictions, a XXX restriction fleet impacted increase Michael by from including store COVID-related Kors in prior stores, retail were year. quarter the global

earnings a variable expense This $XXX as or approximately in primarily to total higher basis, ongoing compared XX.X% expenses looking basis approximately basis percent an XX% supply of reflected operating offset leverage reinvestments was and year. benefits basis revenue. performance. Operating XXX on higher On Supply initiatives, expense greater approximately reflects XX.X%. call. the of This versus to XX% year. Now by revenue business. than strong increased costs last chain increase to strategic margin second on our XXX expanded company forecast Gross year. points million prior our expense margin points quarter costs improvement absolute we chain provided at higher-than-anticipated reflected the were points XX prior This our compared of

than at expectations margin operating to basis year. above By XX.X%. X%. operating Michael more was XX.X% operating points greater XXX of Versace our margin flat expanded Jimmy Choo negative margin operating brand, XXX basis positive expanded company was prior points from total margin X.X% to XXX and Kors And basis XX.X%. result, than a As points approximately

for Our the the in loss our discrete claim item this associated quarter with carryback COVID-related a than U.S. was X.X%, was lower operating tax rate net a reflecting expectation,

were we result, during a quarter. As the benefit to the realize able

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

During the debt. quarter, of repaid approximately million we $XXX

cash reflects to commitment value, Capri the million X This part a future the return that brands. shares strong belief our As potential luxury of also Holdings $XXX repurchased represents our ongoing our shareholders, of we worth quarter. in and to momentum given of compelling growth

at of inventory. increase Looking above We reflecting the year, with ended in-transit $XXX prior quarter XX% inventory. significant a million,

During shipping we even greater were the delays anticipated. quarter, than

result, were deliver which in a our revenue the As quarter. expected, constrained than lower on-hand higher levels inventory ability to

me address our a to going forward. outlook let take Now inventory moment

second, continue We levels to expect following we first, relative manage to need ensure inventory to year tightly the meet will well better to to prior This demand support us earlier. revenue to we initiating core growth inventory, for product consumer increase expect increase meet transportation reasons: as and to a we as but costs. consumer will are reduce receive new where demand; program we enable

inventory expected growth is for XX result, the next a outpace growth months. As sales to

guidance. turning Now to

$X.XX forecast revenue of and performance. third revenue billion, Capri For Full $X.XX Holdings' approximately we billion. approximately Jimmy billion, of Michael fiscal $XXX Kors revenue Choo the guidance approximately million the of XXXX, of reflecting Versace better-than-expected quarter approximately assumes $X.XX year now revenue

points XXX expansion. expect now approximately the margin of For gross we basis year,

Turning expenses. to operating

We approximately of continue $X.X forecast to operating billion. expenses

a XX%. we now full approximately expect operating year together, of margin Taken

approximately anticipate margin we an Versace, now of For XX%. operating

margin Michael And operating now approximately we expect positive X%. operating of we For margin approximately a Jimmy Choo, Kors, XX%. of an anticipate for

of Choo contributing income. result, houses ahead combined Both operating timing. a our operating are As luxury of Jimmy and generate XX% company anticipated to well approximately will income total Versace

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

the expect a would history. company's earnings per share I fiscal to this the in earnings $X we to approximately 'XX. generate per represents diluted result, note now share As like for of highest

revenue of to with million $XX revenue XXrd associated approximately $X.X Kors. Jimmy week quarter billion, approximately Choo fourth million, forecast at $XXX approximately million We company Michael of revenue guidance. anticipate of and and including million. Versace approximately Turning of approximately revenue Michael $XXX Kors Choo Jimmy $XXX total the We

at operating looking Now margin.

approximately also additional e-commerce the strategic fourth expansion, marketing, the This margin XX.X%. margin of offsetting expect incremental initiatives regional expenses well supply margin gross our includes week. associated in includes points revenue initiatives XXrd We growth investments as growth quarter basis ongoing support XX benefits to operating costs. chain will of reflecting and with higher more as be than Operating

Looking at operating margin by brand.

anticipate XX%. we Versace, approximately For of an margin operating

Michael operating of anticipate margin XX%. Jimmy we XX%. And Kors, for approximately of an margin an For negative Choo, expect we operating approximately

items. around forecast weighted certain nonoperating XXX XX% net of approximately Turning million. of of average approximately an to interest million, tax $X shares our expectations We and rate effective income outstanding

result, expect a approximately As we diluted share earnings $X.XX. of per

for Now I would expectations discuss preliminary XXXX. take like to our a moment to fiscal

challenges. We impact supply this of are given pandemic chain sharing ongoing and outlook, the the

For higher margin margin to revenue year full 'XX, strategic also growth. supply of includes reflects approximately over success investments we an XX increase ongoing an across anticipate houses. the billion, approximately reflecting year chain approximate momentum offset $X.X points initiatives all of fiscal basis in more We strategic of Operating XX%. full than luxury of X 'XX, support gross approximately our margin This operating fiscal forecast costs. revenue as expansion increase XX%

approximately to $X.XX. year As earnings per a XXXX we grow XX% result, fiscal to share expect

Looking guidance at brand. full year by

Versace, approximately revenue billion growth and XX%. XX% operating anticipate For of we to approximately $X.X of margin

For expect million approximately expansion approximately of we with to approximately of $XXX margin significant Choo, and revenue X%. Jimmy operating margin XX% growth

billion. We of investments $X.XXX benefits the of operating elevated revenue XX%, Michael to approximately For assume support we costs ongoing and to Kors, strategic growth. our approximately of X% chain increased initiatives, anticipate reflecting growth margin approximately supply

year. the and to fiscal we revenue, share I expectations quarterly press growth operating through each of in every outlined XXXX. the anticipate cadence more strong margin, Starting of provide revenue, and release, around with the our color gross earnings regarding quarter Now margin our would like per guidance discuss to

initiatives Turning of we to year. benefits from strategic continued gross the margin. expect the our throughout execution

gross costs delays. chain However, quarter, the costs multiple reduce the initiatives and normalize, margin we and expect be expansion quarters. supply as begin benefits of costs the will both We Therefore, trends in first third gross realize contraction. and anticipate will chain we resulting progressively highest improve in margin mitigate designed year-over-year in to to supply fourth

Now as to operating plan in investments support This expenses. that marketing, includes such long-term initiatives in and moving to strategically We omnichannel areas initiatives invest incremental will growth. data analytics capability.

Now and turning higher chain operating to we With first the anticipate operating margin. supply in costs margin lower increased investments, quarter.

second improve in expand We fourth margins to quarters. the expect in and the quarter third and

year Taken we strategic above progression strength the improving share In are ongoing conclusion, quarter, and our in an initiatives. chain fiscal with the together, of 'XX reflects of results, quarter earnings face of supply luxury challenge. the This performance fashion still throughout particularly with we every our pleased third execution houses anticipate per year. our the prior the

from pandemic our future earnings Holdings emerging are about extremely as company long-term well value. X confident the meaningful Capri believe potential optimistic than that to growth achieve ever. and as luxury increased shareholder growth brands position powerful our remain stronger We the is revenue and We

for Question-and-Answer Session open questions. will we up Now the line

Operator

Instructions]. [Operator

Our Evercore. Saad first question from coming is Omar from

Omar Saad

about Asia? already love It's It's brand. -- your for brand? profitable. be question big you. Is here, long-term kind brand over quarter, where call for of vision term. to congrats. you I digital? Michael And the And biggest thoughts coming guess I'd opportunities? What Kors you guys, Another a do premiumization high-level it it first effort? great it opening get hear, would is long and for successful this think you your in ahead thinking on Is Is Josh. brand? this what the the my it -- love your how international? on to evolving Would see Is are the welcome, the

Joshua Schulman

the big Omar. to with the impressed so the as it's talk brand this months And here much continued the stronger particularly the been few to has. seeing last mentioned, team elevate call in great again. brand that terrific from team. pandemic clearly, am doing and have the that And team. continuing what to to through Tom authentic you a the be be terrific you, will part premiumization, and of power in with DNA seen what to ever. by It's I And in emerging lean has really we with on brand, the Thank Michael pricing your will than Kors. with to point elevate it's to I can modern about how our the And continued Set be We encouraged continuing a to this lens I've be Jet to see brand.

share a areas view a just Kors Of growth. significant But course, fulsome Day months. I'll strategy more the a in see of where to for on Michael few a Investor at touch I few

first, digital. So

We nearly have a database fast. that of XX million people is growing, accelerating very

the of opportunity this up last the nearly million XX there's an to period. power picked to the drive database, e-com XX% John database And we that globally. mentioned, people in As to business harness

And something that passionate am I about. so that's

list of articulated Asia if as there. some your is almost another my you It's point. thoughts in

basis, double to our remarks, opportunity are our that's And Asia, where at the a revenue peers mentioned least Asia. peers. clearly, we are is that reception an our we products, we're think underpenetrated his there having category area and in on there. relative also in And men's very then I the luxury to to underpenetrated positive versus our John

elevate continue focus will So brand. to continue as Kors all Michael those Day will to Investor at be about that you talk we me areas specifically and the hear of

Operator

Instructions]. [Operator

Boss from JPMorgan. coming from is question next Our Matthew

Matthew Boss

guys, Congrats nice another print, Josh. welcome on aboard, and

Joshua Schulman

Thank you.

Matthew Boss

do of the a initiatives year, exit full-price prospects to any foundation next for last, I category? for tourism? on timing you return better So give then John, opportunity? continued accessories potentially double-digit best underlying this selling? confidence line we that travel think set And Or and handbags and now just about? how is the speak does maybe, guess, the for have to about back top your as Or pandemic, could there a think for growth you to as a believe in your maybe

John Idol

our quarterly about results. Matt, nice and comments thank you for the

biggest that the quarter. during -- The in is were first luxury revenue at to globe. houses during the a of be kind to for We know, that time. of Kors, you thing the something all about. And accessories. piece all that across long double-digit which one the very mid-teens with of of it's that's growth we've also in At like business. speaks Michael saw the get of the I'd it's of quarter, margins business. the accelerate And towards key pleased at luxury And X opportunity we And really we the saw we've traffic Versace, of biggest the the say then as the to the inflections performance those what X and brand stores our obviously not was seen Jimmy that consumer talked will Choo, for operating the at really health houses

all to our well think spring, season. campaigns I it as we're well new relates over are incredibly So of and the the at The initiatives executed product. out dropping X start the all houses thought, really marketing were, X positioned I really as we holiday houses. And

to seen brand you campaign, very -- saw also Jimmy you Gigi. love with us. I campaign Bella is and Choo, powerful. Versace, the Dare think you and And I the about Time creating marketing some this for of at wonderful think may have -- sisterhood At and really heat Maluma

then on our a around seeing that. really we're as Kors, reaction at about, Josh focusing talked And modern Set strong Jet so through lens. heritage from the And Michael some consumers

to marketing powerful going that. very around some see You're

to product introduce themselves, look that's and way through I of problem way into that because when when think really get too have positioned at leaning that the I our handling the we trying the are the not clear stores. to you So product much brands

think coming SKUs the COVID, reduced over the of so helped through all really one companies to XX%. And us by things I that's that, across the

And to are some going that. more And to just companies focused. go the responding consumer be is further, how to

road quarter. There's healthy. of So that this North again healthy. finding then on be in quite far in to China. rebound we also consumer so continue to bumps the in health find Asia, already We're We're is be the consumer some And the seeing general, Europe extremely healthy. in America in in a

have the consumer about lockdowns again I've think road as what heard tourist for on outlook that all very and any travel. in you're restrictions cities, include pandemic. we going But then see, accessories does And see our in something the especially can said lastly, right territories going travel and in the we get certain to XXXX from with around You've for calls, return certain -- will the on -- that's forecast now But And of certain we strong multiple city. we not our it, bumps flare-ups through. is are footwear.

a be would and us, that retail both for locations. tailwind in our in travel EMEA upside So or

Operator

is today Stanley. Our next Kimberly coming from question Greenberger Morgan from

Kimberly Greenberger

or and product the I Okay. sort wondering bit just Really nice term, could in results the that's underpinning more. the strategy if And Tom, then, core growth air X versus results The little drivers X to terms business that there? and And of what delivered say you last the -- brand XXXX the fantastic of you a versus, here. has financial if I wanted categorize of growth see you earlier expecting momentum if I X product were top assuming core inventory the your could start in inventory just the receiving that some you sort or unpack wanted it because you I let's is on just to say, incredibly. core growth on the just inflection fashion as in -- was you're freight? X flow now, Versace of reflect Versace years. to has John, the just on reflect long of really to investments made,

John Idol

Kimberly. you, Thank

at are executing and who first off my really they're ones on the these because the have hat Versace initiatives. take teams I So to to foremost,

we it when the the were company, bought know, as multiple $XXX pandemic. volume, in hit million to we by had you those, had So lines. then We shaved reduce

strategic And so to uphill an to definitely trout walk place. put try we had in we wavered. or our But initiatives never

going discussion world. most going Versace talk that. we'll The to around brands be And nowhere is at comfortable have now performance. is. I the brand opinion, in $X and the sight my the this of belongs luxury and is I you is time it a not question than in on category is again, feel During is how said to And $X it the all think lost I'm we've real near sight about never Investor clearly period, milestone to in to we Day. of very The the more in goal what that a billion reiterate achieving. the be billion it going call, we in the previous recognition bigger some point. much this important for brand The at That love this of

this last closely to -- I have those need that say much is we X we down we trend. before is want to to have into products feel carefully, able And X to and will something the so do What X I fuel one more though. that off or that be together manage things that's thing -- to bring back explodes want We now and comes that. don't drivers. to get that then

try to consumer with it. invest, So desire not let you you too and have luxury, hard. have And it pace the to push really to

So that's very be will investments significant we be brand. in cognizant but continue this to of, making going something we're

So X the X things. are

we'll that luxury in of First those and delivering luxury a ready-to-wear, this is at XX% turning leather are going not-too-distant this Investor but house volume from are our into And just be now and about categories. by more foremost, we well goods runway the not future, X to, talk we a Day. over house. driven Again, our

us additional So also that, acquiring consumers. going and to help really that's leaning with margins into also

is investment the stores XX put years. that over we very there thing was renovating XX last these Second all into to little are stores. our of Unfortunately,

quite in be seen of again, Xx of biggest they And XX% productivity our any to levels our are at before, approximately renovated have the done stores as said We the stunning. grow to new competitors not still this we've some so are if And we and XX that of in we productivity of stores, I've the stores increased by balance hope could the next get revenues the you world. fleet. these significant. in of And in months. you the And seeing quite

have have. inside we of the to we room lots that footprint grow So

and And honest the up ago. omnichannel the North that and to we're our with consumer, the way is engagement Europe and them told have past digital initiative. an consumer that and we turned with both handling them quickly initiatives way second And database years from standpoint. with from in was you They are all in we've how way America. third handling we're Again, our that caught in the you my company in experience. omni Versace, the only again, behind very this hat significantly managing really an the that the X-plus we're take that's at very organization everything I entire the months, was communicating previously, growth So omni those on off of few

So from significant. quite alone just that the seeing is upside we're

coming before tee see there's it things to around really I'll up is company And very, but going some being show. and going close turning accessories. able February powerful again, you leave you're in Donatella be to significant over last growth. it, coming be what this thing by you So the getting up surprise think I'm the to when does very for another quite poised leg one I to to impressed Tom. for

going quite for X We In continue the months. up. supply terms to Many flow, the this ports of don't actually of least it next chain backed improving. on is situation see the inventory at are

company will of our of stores. that we've the demand, a we stores something can not it's season. I core will a going not think, it that. anything let's be do gross We lot product. holiday in for, margins at increase products Kors Michael it's used the one And in the we have whether on our being of of is our particular, weeks our so strategies It help missed when we're feed to and product, that so about, core earlier supply support get some core concerned to that around except larger again, And able us during feed

our more very initiative. we brands think channel, a a We'll do let we're I'll we into Tom still across this of still it's all where wholesale detail, and mitigate So own playing behind we catch-up but far X just -- are some not channel. in will the our significant go in Kors Michael

numbers the have QX, a in has ship wholesale as that that to the the been bit degree So picked just up channel that's you not to requiring. able demand because saw we little but

I'll caught good us stores own support our to really in partners. an and a it well still you. going months over demand the there's up to that turn imbalance of So and better X can we between our supply. take part fully as Tom, it's ourselves position to And as wholesale get

Thomas Edwards

thanks, When delays, increased the as during my remarks, and Kimberly. really Thanks, at look John, QX, in we I noted quarter.

product delays the on fill mentioned, consumer our John getting robust have in water we were product our And just So as and extended. demand. enough didn't to

to Looking forward, continue. Kimberly, that we expect

more have change. And and smooths So and will key. component around core. is but and allows times. a core order other brands, flow fashion a We'll maneuver that of in product program earlier. all programs, we've put not our clearly -- us the to Fashion out variable still manage X lead core critical is product extended among these The the that and key one remains -- piece

higher time the significantly quarters satisfy would frame next spring have I mention the consumer and gives variability. of expect do result inventory, to we a us flexibility looking time And full at normalize just manage inventory. And allows that expect to managing say, again, tightly over of to we're this, frame This term and that our over short would As demand. manage continuing after. longer year, this us it or to few to the but manage

Operator

coming next Ike question Wells from Fargo. is Boruchow Our from

Irwin Boruchow

John for and -- this I guess detail, I great Tom, is ask next Josh, you, wanted year. thank to

now Versace? discussion that M&A, you goes versus how buyback an stock of how buyback guys just that cheap scale Just versus it obviously M&A the EPS curious a guys kind is the I'm with on is sheet flows potential as levels. of of balance the balance to tremendously are then I proven do as the guess you internally. acquire in ability us? the the right and acquisition kind that's of the topic there giving and which on curious year's you've business, cash next above 'XX And are embedded with

John Idol

bit So next it turn Tom, and piece over and then tiny on to the just take I'm going to M&A a year, you.

don't that we'll relates our and term. publicly, involved it to in luxury stated If in anything again, active research. near we at. interested in those European be see We available, in absolutely it typically dialogues expanding basically will it's mean that brands conversations. becomes the we've will be As we're only M&A, we're looking And That portfolio. something

that in So there, to report nothing active will we be marketplace. except really

next think, supply of to it's see earlier-than-normal are I impacting of for out I just and of fact that point hard terms year, something. you In all chain we're seeing what terms in outlook that gave, guidance or costs because want the to We us.

see appreciate trying the So we're supply we I light to you feeling in flowing for of hope all of year you and be as give community particular, chain next investment how in and that to these as transparent transportation possible challenges. a

So that's the really that. around rationale

to Tom the about talk balance to over it turn me Let sheet.

Thomas Edwards

on the love comment and our about the brands. cash And Ike. this Thanks, because appreciate X of I cash I and talking flow, cash company flow generation the

pay doing our all debt, both across we've been buybacks And seen, share as you've million year, robust quarter. So which that that us this up down increase this to allows been quarters. $XXX and the has to

free progress, cash next for So expect year, flow. to strong generate we'd with continue continued to

leverage have low. we sheet on even debt Our the is extremely balance our with

there. our a the have we strong remain buybacks, feel a again, valuation, with important of very I very capital And So priority. component position allocation

In of actual the that of haven't provided terms at point. guidance, detail level we this

normally While do. be to overall, it something shares of we buybacks guidance say at we would how continue that's But that. the I include and our incorporate that, may we'll don't would provide we specific that when year, the end more in on into

Operator

Cowen. is next Chen Our Oliver question from coming from

Oliver Chen

think Kors you brand, has attractive lifestyle generate I innovation continue and as simplify and about mean, as you multi-category, to Michael And and portfolio well? for Signature thoughts would Kors amplify logo and you your on business. the priorities the a love happen may next. also, what do see there footwear as opportunities Where Josh, and very biggest and

Joshua Schulman

you. Nice speak Oliver. with to

Signature of And of people job equity signature advertising literally I has very really done brand a the is interesting I the Signature when clear reflection So walking brand and around buying think products, terrific are team something think it's amplifying across they're heat. because a here categories. brand. And

at our such And most of product good profitable is prices that price some brand. sells at the indication full is the of a it that premium also so fact

broadcast also the Signature so how Signature help I drove the more metallic this Signature And was that team more really innovation was think that works a based almost within was it the using the the ways. I see and our of to one and in social pattern that mentioned in John culture. embed was that highlights which how that. sales, more virtuous you'll and of the part was a collaboration how And marketed surprising collaboration of following channels built think and in in Signature across iteration. as globally cycle you'll Bond -- October, see Certainly, And it's of which did then a

the a house. I living about as with as New a brand own Michael think fashion York Kors Kors of with And is the with interesting himself, this really designer, one brand, touch you narrative. preeminent Michael unique helming that is starts the that things, its

of And so DNA believed Jet always with the the the he's it how really starts company. categories Set in and those that reflect

footwear. So you mentioned

where and classification, time to there. we product So to refreshing our the most the new certainly teams we trainers, there business spending the I'm know are brand, boot I understand certain our is And a across getting authority and iconic classification categories real in to classifications priority. with getting dress in ways can as footwear, whether know think how it's our or products hero have

Operator

is Our Piper coming from Sandler. Murphy Erinn from next question

Erinn Murphy

thinking from first versus year. base? question and you've the over potential about consumers you. customers Tom, you attracted you great a these on what bit quarter new your quarter. income stimulus little seen Could Congratulations that for XX.X in a the clarification, And the the lapping historically are your of fourth in just million How then versus you John, profile age around impact My last quarter guide? a guys is talk referenced, about more new the you

John Idol

comments that's have a our Michael off job. quarter. last that's I didn't Josh's take added company. listened couple teams hat XX Kors consumer things. team So people Almost spectacular promotional mean And I incredible. The we before, of Number Erinn, our around the really lap again to database. one, frankly, to quite XX% we my why, did you of the in a million to year. activities to And

is selling up Our price dramatically. full

-- the is so grew entering also double brand, customers health all seeing consumer And reactivation customers, X in brands, digit. existing quite at AURs really not we've the history. and that The strong. we're both our of new the lapsed new had And and what up but of largest company's had are only the we we is

what you hat Michael says putting speaks speaks my an to Versace see are to listening all it quite volumes Michael creative I I Choo. you Jimmy that the seeing frankly, well across And at again, -- and extraordinary it that our think hopefully really and what while what was as Kors, of think it this all teams together X you our But job to volume messaging are did. we're for I as call, to So brands. -- teams want to tip

because bit buy handbag pricing the in over little are come something to and slightly small a But to like younger mainly and we've due as expensive want always Michael someone with consumers older consumer a it's the younger to or leather not more tended want have years. purse particular, all itself. that which want a unusual definitely might of they customers, ways, as a way to cross-body seeing more Jimmy really a up goods, Choo, product. might We've a step X have to Versace the a something or for accessories, engage they we're to many to Kors handbags had is, brands, So customer. to had in small But unusual which that to coin

the the entry we're brand influencers using for incredible the have fixes people, or of main I us. really many more engage we And X with that we've points engage campaigns to with consumer brands. got the So our to whether really different it's think

their Kors also in digital, brands. all many the us it And Choo for again, remember, we and X most So are healthy all Jimmy at saw terms of I just all across probably quarter congratulate best us the one consumer that's of across teams to Michael I with to at income the other extraordinary effort. -- coming Versace, how And not and these consumers engaging thing think our want was in for store. of age

the also So way that looking clienteling and we for the are been at huge our platforms, company. success that's a

from at even So as people us is more the and digital level, omni, when about recruitment sometimes at than for the talk we important level. local level, getting store

again, turn I'll Tom. happy about that. really to So over it really,

Thomas Edwards

come in Sure. in the impact And regarding improve of what's our has and there gaps past, in with it. expectations, We've brands. included the Erinn, on. momentum been only then the stimulus the have seen our stimulus

when sequential great the we've or healthy look there wasn't is quarter demand remains very, improvement even What the believe, our fundamentally we to So compared robust. across seen you was pre-pandemic if brands and strong levels, we're a impact. seeing is the consumer, very sequentially the now and stimulus for

brands. important bringing are in and we enter And shore with into our of uplift all the will as new in incorporated help fact So trends consumers, QX. in that's this of We're is line the expectations. well as QX, our and our an demand continued success that

the So and next year. incorporated the in is QX quarters for both it that you've seen guidance

Operator

coming today BMO Siegel Our final Capital is Simeon question from from Markets.

Simeon Siegel

really have Josh. Great here. and welcome to It's Congrats on a the strength. job, nice ongoing to you the call,

We've quick ones AUR X just growth. Really that. So been for seeing fantastic me.

Your comments are also about really ongoing encouraging. opportunity

what the anything received seasonal the so those so just goods is And there? of what over quantify along are about view should in-transit the within timing there in-transit thoughts opportunity of just was inventory. the on And lines? we just So whether talked we that Can just or you any on order I about now? just any inventory Maybe go-forward then, know concerns know the magnitude the product? balance think whether Tom, we late inventory, embedded

John Idol

to Versace, that that's going Michael Josh Choo, that full then it over strong turn the are sell-throughs and the selling and Jimmy in seeing really growth and business. very Versace for grab driven I'm AUR accessories at Kors. price and We're happening to business and by

ready-to-wear, Accessories higher and Number Choo, full versus over X -- been Versace, brand what has resistance Number more So we're those to We're growth which place underpriced, sell-throughs perception one. not always relying price can we putting if putting has the been those that those price price as AUR take it's significant really increases at two, talked and and And that, to in increases. better taken, there seen have will things. come. The quite Jimmy rates. much about more much, driven consumer we've is. absolutely no I by on because we -- the be well. any say have consumer and markdown of

happening about you to really that also point had with Investor price Josh for I target I'll price levels companies. it be is about will at we take to will over to higher All certain at the of it industry prices. margin begin luxury where feel of Versace, but talk term with Michael to luxury Versace positioning turn increases. that Day, we bode for the both at the gross more at So a is which company. We long this we'll we level be to you say Kors. wanted well raising AUR which competitors. good And Versace today, these than certain were the competitive should at will what's

Joshua Schulman

Tom And think So America, we're that environment. by said, high consistent AUR been teens, lapping more important quarter. noted, led typically And was Kors, the not those has in growth to as specifically it's Michael promotions. North we've note promotional I seen in in holiday terms for we of AUR that, as a the which

pricing because And translated hats into -- everybody giving has to demonstrating pay is And brand. willing has North robust the power. AUR brand my the consumer understanding to confidence, is it's the America And off so that the really it growth. team that for very

to So better on continue specific and best increases you'll see think as within more each we on opportunities best and good, focus a the classification. price about emphasis the category

John Idol

quality. Josh on historically, go to said, not to as price used sell And We're want just design. and much And one company about handbags, clear the add taking to be what more years. thing. to we're over look improving I We're the to truthfully, increases, in back higher adding particular, just in we we

the that's think positioning And don't were we we over few back we're for before. to wherever term. were just so past And years, this long going right the we where company

So prices is want on And think product up, everyone I'll the the really to the not do for some of only remarks. give finish going be will to which but go I closing itself, positioning understand. it's really up you Tom, inventory? to just important

Thomas Edwards

to. Happy Sure.

mentioned, resulted it the in It same course, the increased. was not that regard with increasing. in-transit, level. of our Kors meeting like were demand. Simeon, as were consumer on-hand X.Xx America, prior year inventory in sales in significantly that around though was John overall which, we is to in that over more even company North challenging And year And So what for certain the areas, Michael even our prior was it the level was

receipts, be that in-transit, the want expect few as next significantly past of a as that's in result do next -- that A mentioned, and and At higher same be to the through regards supply we will quarters. that demand. few us higher. to portion will in-transits quarters, cost So getting time. the be would will we meet to spring. normalized I time, help And over consumer Inventory, be we're of the that chain the that we that the make product sure it in, we is noted higher over and believe

John Idol

Tom you, thank and Josh. Simeon, you, Thank and

And to here the think and his first Josh He's months. team. leadership is So welcome the again, to for foremost, Kors been Capri. bright X for future Michael under I'd I like and at ultimately

off So pleased And conclude also were on results. like to quarter again, that lastly, I'd trends. the by Josh, We with welcome very is to team. similar saying starting our fourth third we quarter believe

And the we our level of be in health the in company's outlook, we consumer history of see this will highest this we are indicated the as the revenues So had continuing. -- year.

the share historically. a from have well where at $X per of As as share, been level earnings highest we growth significantly

growth, that really our Thank in we June. for and positioned significant us is So more I joining for very company this much about think sharing Day you future look today. forward at to Investor

Operator

does Thank today's you. conclude That teleconference webcast. and

at your your You day. may participation We wonderful you disconnect line this a today. thank time, and for have

Capri Holdings Limited (CPRI) 2 Feb 222022 Q3 Earnings call transcript