CPRI - Earnings call transcript Q4 2022

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

Operator

Greetings and welcome to the Capri Holdings Limited Fourth Quarter Fiscal 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jennifer Davis, Vice President, Investor Relations for Capri Holdings Limited. Thank you.

You may begin.

Jennifer Davis

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

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

today Unless basis. basis. measures COVID-XX exclude presented charges. financial to implementation In view be a will on be on corresponding otherwise non-GAAP earlier today earnings website costs, today’s our financial please will noted, presented cost on other certain information GAAP the view to charges, related cost non-GAAP a reconciliations, charitable and call certain restructuring in pre-transformation posted war related information donations, the the addition, To all release capriholdings.com. at and charges, Ukraine, ERP measures non-GAAP associated discussed impairment These with

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

John Idol

Thank you, Jennifer. morning, everyone. Good

houses. we am of progress luxury across fiscal made all I on our XXXX, proud back Looking the

XX.X new databases as continue Versace, Michael consumers evidenced added brands: last and expectations. exceeded by Revenue over original powerful earnings year. the Kors, three our and to results our resonate Our Choo across with consumers, million significantly the Jimmy

gross the revenue, company’s in share the and achieved history. we fact, In per earnings margin highest

and navigating to record our the dedication if the for Our strength able of results ability an importantly, initiatives. globe. results, brands and to testament achieve Most would a the while been our the teams of global across these strategic we pandemic growth have work, resiliency the are of our deliver success hard challenges to not unprecedented not of

Before would war recognize all Ukraine. to to impacted by a take results, moment I like turning quarter fourth to those in our the

and thoughts the Our millions have out these prayers affected tragic who go by to been events.

worth have made including Michael relief the Versace, $XXX,XXX and with Relief donations the clothing Choo from Crisis charitable help UN million to efforts, We of significant Jimmy to Fund and humanitarian essential Kors. €X

soon. We are resolution hopeful a for peaceful

in share, to and that quarter revenue, supply were turning COVID-related Total to despite Gross expectations. three even chain ongoing above challenges, results margin performance, expectations. pleased the earnings higher fourth war our our continued revenue Now, Operating supply The costs. operating at XX%, and China with better-than-anticipated margin achieved the chain fourth reflecting results in we brands. per all all quarter of in Ukraine. increased margin company expand restrictions was exceeded these XX.X%

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

In stores XX% XX% the strong, increasing geography, reduced. consumer quarter or Asia. with a partially trends end quarter, regions sales beginning to the by growth impacted were new In were By trends X%, Japan our of and Southeast expectations, if strong by despite offset across in for houses constraints. decline revenue closed increased been not In in as and was the trends declined improving operating were This in by of COVID-related increased inventory the growth the in expanded. China, revenue Mainland revenue hours exceed China. would all also revenue and group restrictions but by continued being Asia, at the reflecting certain war in Americas, our of robust approximately expectations, our XX%, have lockdowns domestic driven above Looking greater EMEA, demand Ukraine.

Now, of expectations. results, ahead which turning we were Versace, pleased with with brand. by Starting our were performance to

exceeded For all growth across were year. the demonstrating of product revenue the which billion, In by strategy, momentum fiscal approximately initiatives. versus as results. consumers. strength brand of Fourth a XXXX, women’s received positively Versace’s revenue by the fearless categories strategic sales quarter success Versace driven accessories, of increased and We our quarter XX% $X bold and component record growth saw increased XX%, are key designs prior our fourth

including quarter, pastel billion shades footwear consumers women’s to compared Greca gain footwear. $X brand increasing as a Versace also Virtus, featuring are fourth as on our With well in well. fashion women’s fresh Medusa, New increased accessories performed codes, In core range Footwear our exceptionally positively silhouettes styles performed build exceptionally revenue to performed the styles making Medusa. as expand La authority we responded Greca approximately we well, Medusa our over progress goal XXX% in time. Dress and continued to offering year and significant of and to XX% sales La in we iconic codes. prior to over luxury focused

women’s up in new as strength double-digits. and La the in prints men’s resort pastel collection sales embraced saw and ready-to-wear consumers signature Greca tones. we with well The Additionally, pattern performed

incorporate house Versace’s We broaden also core see in strong reach. our which codes continued to performance expanded iconic lines, to

center Bella men’s house and women’s and was across core Gigi Gigi concept Maluma, songwriter, kicking of herself. Versace Lunar off a of China, Donatella the consumer Bella and impressions Donatella close also across garnered awareness XX campaign campaign and brand media campaign the bond launched campaign. relationship sisters, featuring an million with spring engagement, Donatella of XXXX of Versace’s featured between festive long-time appearance the summer their Colombian and Hadid, The with a the year all channels. campaign supermodel a Versace friends collection. from In the of the family social The approximately Tiger. of terms dedicated In the launched Year Year capsule At New singer bold, channels and House. another campaign dedicated friend New the born, was

Dua world’s Dwayne continued profile Versace high a Cat the Miley Lily Lipa, Doja to to the of few. most name During Wade, Grammy’s. many dressed at celebrities atelier including famous and the Cyrus, The events, Oscars and the James, adorn quarter,

During Greca on newest of engaged globally. social brands Milan women’s XXXX XX fashion one launched our our The Gatas million the collection, further fall/winter growing accessories Week, Versace [ph]. We media. In the collection most Fashion Donatella this amplify accessories Italian was business. generated show show, will fashion impressions anticipate new

helped polished the revealed global impressions XX increase envisioned tailored globally. year-over-year collection men’s drive XX% a Versace by million video. into was Donatella database. video addition, others, In in powerful initiatives, new collection men’s generated The the XXXX These view a Versace’s Versace. The fall/winter runway image to among

morning, this of formation announced we Additionally, the the Foundation. Versace

confidence LGBTQIA+ pledged strength billion our At strategic revenue community. inclusion has the in advancement to promote ability revenue year history. the our to original the our its million time, $XX world. to significantly initiatives. faster company always was our meaningfully for diversity grow This and quarter results the to over safety support year above the at operating anticipated time. in of full over of Overall, higher the year XX% in Full results Our inclusivity. and of house than and of success known is margin in wellness brand for Holdings important forecast. These Versace’s and Versace’s full of reinforce and $X level same equality, least increased Versace $X fourth to another highest step Capri of been the in the the billion speak we

bag. our to Moving fourth of strategic revenue execute accessories increasing expectations, glamorous success In initiatives of revenue Bonbon driven strong Choo, quarter as progress sales Group. our our we with the results Varen family quarter tote structured continued as and our were with accessories, quarter levels. footwear we expand revenue ahead to a we Signature Fourth and continue our to Varen opportunities. increased our achieved on Jimmy record by The capitalize handbag year pleased were and multifunctional expanded fiscal double-digits XX% fourth and on shoulder

in new fact, a shoulder seller was fourth In quarter. quad the the top bag

driven with up sneakers cage sales inspired retail part by increased biker our office In the COSMOS year. significantly exceptionally consumer sustainable launch colors. Foods to activities. is brand. sales, that well, easy of also year and Glamour first strong a signature positive were our and sales casual double-digits. new in were by the XXX% growth touch the social construction success inspired the by footwear We of reflecting a point in over our often strappy new continued bridal sandals, the return performed elegance prior increased rubber Turning bold also to reaction doubled than And well, compared epitome driven as to boots performed see to prior in in featuring we dress continued sandals. to to and more rain footwear, sales Yale the pleased this

design first the Finally, which inspired timeless we significantly Monogram Pearl, launched outperformed quarter. The positioning, glamour as Jimmy embodies lifestyle during we our our Choo’s Crystal and collection signatures, collection, and expectations. reinforce our is jewelry by

Now, to consumer brand and turning engagement. awareness

an our modern Time over the founded new soul defines consumers. singer the Son collaboration appointment XXXX Choo successful the celebrates incredibly Through that femininity. were is In partnership The localized to Jimmy brand, daring continued glamour and consumer the Na Korea. on that powerful Choo. of also spring, again with of marketing million seasoned of The coverage, styles. heritages campaign first Choo once her media for communication Instagram visions February, as with Hailey For embodiment featured Jimmy its ambassador emphasizing Bieber, fused launched the campaign glamorous of drive Eun and and actress, spring reached posts who Jimmy to Mugler. Dare the campaign and glamorous XX two

over including the expensive. In was social to Oscars and at across million red including engagement strong impressions. high-profile generated carpet presence sell-throughs, also Jimmy XX Grammy’s events, addition Choo’s collaboration solid the media,

year million in revenue Jimmy anticipated included of highest level wearing year Gomez, fourth to Jimmy the many database. global strong potential. Full in margin Overall, history. house’s operating and we reinforces year Choo’s the rebounded Choo faster Watson, These Jimmy much significantly Choo’s of increase Zendaya Likewise, revenue our Jimmy $XXX the confidence Pine. helped Gaga, X.X% to celebrities operating luxury year-over-year XX% our activities Beyonce, consumer in expectations. Some a Lady than Chris future full Choo’s above growth quarter margin and expansion Emma in full the was and Selena of contribute

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

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

scale as globally strategy of represented to our our compared year. the graphic approximately to Consumers key the In the as responded the techniques, prior signature assortment updates to fresh prints soft Signature in such introducing which leather spring quarter, our In growth hardware color We and consumers on also in start. well updated During Hamilton, exceptionally channel new Signature last year. Maryland, global as drive focused new including margins. AURs while off colors a core continues and Carley, and categories XX% responded higher all quarter, AURs to dual sales to and and is in our Soho styles. increased Signature, XX% a well. including retail remains Greenwich, performed increased luxury across combinations. to as double-digits double-digits Accessories icons, styles retail remain versus iconic phenomenal

casual we featuring footwear, strong hardware and MK with sandals, both well. consumers to to saw sandals exceptionally dress Statement performance styles. performed responding Moving in

consumers glamour driven prints. continue by prints Men’s performing remains of knit laid-back responded as growth iconic strength the driven dresses. with active, signature categories performed see to strong including we in well the to Women’s in spring signature fashion one by retail assortment, double-digit best the signature and of accessories. ready-to-wear also Additionally,

announced campaigns Bilo’s unique St. the to build sophisticated its In for of featuring and Meanwhile, first Bilo, in as engagement. which XXXX category playground spring Barts, help and the and spring York approximately portrays the awareness with China York of the the made is was strength set. in international the determination focuses city his watch the the Now, Michael Michael Jenner allure, New channels ambassador travel. announcement City Kors actress, impressions. brand Wonderlust The celebrated Kors jet Kors jewelry turning as Kendall January, collection equity XX and love that and New consumer passion market. of reflect social Michael to romance of gained campaign The a million Michael’s his well inspires. on campaign set Kors the juxtaposition on Michael

the attracting a York musical Week, media. all in This drive first to Kors Fashion contribute the even performance year. the half greater time globally. Michael most the us and and the City about of engaged out. place the York operating highest generating strength global and strong Said social been New put in optimistic media for The the margin fashion Michael increase fiscal year his $X.XX Terminal night. and younger conclusion, consumers. new about social venue was In we to margin year-over-year at was Award-winning brand. generated database company’s chain history. X original remain were Michael enabled demand above anticipated During at billion pleased of and night. live to demonstrating the than to are shown consumer have New The pandemic year in we Kors This they views on desirability at artist growth headwinds XX much Miguel, music platforms anticipated. iconic allure strategies supply night XX.X% an we faster profitability the Kors. in celebrating show of collection of continued as across as Overall, was revenue revenue, higher in venue audience Michael’s expectation. the by Grammy future earnings have show rebounded brand energy the the ‘XX, our a gross we of Full same million Manhattan, celebrated the collection, of delivered share helped XX% the At The per Likewise, to the than with Michael Kors prior time, fabulous well the the back has full

This returned performance initiatives. Additionally, strategic we execution strength the $XXX shareholders. to cash our free flow our houses and and reflects of generated million luxury fashion of strong

power in forward, fiscal of earnings impact revenue and macro as resume billion of and future luxury ability Day on another year resilience achieve reinforces ability over in and our and our more we of proven Investor you achieve as July sharing we the double-digit share operating growth. the Kors Looking Choo Jimmy ‘XX, beyond confident XX% to at the upcoming our future well The as Versace, to current to forward increases look we of our expect record revenue headwinds. our XX. per are Long-term, Michael We of $X optimism with revenue margin market, a time. for the in move to outlook

Now, turn me Tom. the over let call to

Tom Edwards

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

and with over total was increases year by double-digit brand, channel Versace X%, double-digit Japan increased Southeast fleet of a from increases stores, Revenue year. XX% net increased ended decreased Asia decline of Versace decrease Turning our above in which sales. in million performance geography, by to or revenue a revenue our retail X revenue XX% e-commerce and in XX%, and in retail By reflecting XX%. the a Global constant increased store in currency, in global both XXX with China. sales EMEA March versus strong Asia $XXX of prior increased expectations. offset XX% in Americas prior luxury in revenue

prior consumer e-commerce geography, XX% revenue increased Jimmy increased double-digit expectations. revenue retail currency year would have expectations. Asia impact prior the total Kors, On increased increased greater constraints Kors XX-week revenue $X.XX fourth Choo with inventory retail above from store sales. with a XX%, product For in prior estimate revenue Americas retail or to last or Americas historic we We increased to and well had increases Michael the and last meet a XX%, ended prior had Kors ended with Global from geography, in rate. to in growth over XX a increases in both e-commerce year, fleet Similar on levels, a below global strategic Kors Michael a EMEA of XX% improved line XX-week remains in with quarters, X%. basis, increase of of $XXX more increased demand. channel the in growth if several XXX our revenue XX%, sales. Jimmy but XX%. in even X Choo, our in quarter revenue single-digit the in revenue above a global the sales increased stores, increased channel been have and available our with XX%. Global and of By XX%, revenue mid increased to On revenue wholesale Michael quarter in year. in currency, By XX% high-teens the revenue Michael sales stores, double-digit our increased constant increased XX% XX% of Wholesale strong a and million billion in increase net basis, EMEA net smaller increased in revenue revenue retail increased At intent year constant XX%. a approximately total both to XXX fleet in quarter, our of profitability. Asia store year. business

with of On expense looking This or expense expense higher supply chain versus prior XXrd XX.X%. the reflected absolute to our year. This business XX.X% variable the reinvestments higher year. last initiatives, million XX% XX This revenue operating basis versus increased margin associated reflects expenses, prior in offset XX.X% leverage primarily margin an to of and revenue. increase strategic $XXX at points basis, compared on expenses year approximately a percent week. gross company partially improvement our costs. strong Now, by performance, expanded as reflected ongoing total Operating benefits higher was

XX.X% of brand, Choo And X.X%. to ahead negative basis was points points margin margin operating total operating XX.X%. Michael expectations. result, improved to Jimmy XXX a company margin expanded expanded our XX points XXX XXX XX.X%. operating points basis and Versace to operating expanded basis As to By basis margin Kors

XX.X%. tax of the release was our valuation lower for reflecting Our quarter the Versace. rate related than This expectations, primarily was to allowances

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

cash to commitment quarter. million part return in As of $XXX repurchased ongoing our shareholders, we of the to shares

$X strength of e-commerce Additionally, repurchase balance authorized cash enhancements. development, free the billion the million our has generation expenditures renovations, and primarily program, IT our Capital a were Board the were demonstrating sheet. $XXX new share and store new spent on flow and year for

Looking quarter and fourth billion, our over pre-COVID consistent inventory level Relative at ended with expectations. year last low inventory, levels, sales quarter XX% $X.X XX%, historically to XX%. increased increase we the a a with grew while

to ongoing well seasonal the transportation extended implemented receive as we earlier programs Given core hold new have inventory. merchandise more delays, as

in inventory we quarter a As a by versus first result, increase prior expect to similar year. the amount

moderate by will balance be in end and the sequentially levels the back of expect year. We

basis. to our approximately represents increase pleased very over have $X.XX expanded. revenue strengthened of revenue, China and approximate COVID-related a headwinds. we outlook. we earnings prior last are dollar ‘XX with our in three Since for call, macro has remain an fiscal luxury restrictions billion. U.S. ‘XX, the in strength the This we Capri across year supply reported fiscal fiscal Holdings with on guidance. light of X% turning challenges forecast now Now, Overall, Therefore, XXXX Starting particularly updating further chain houses, our and

to by stronger revenue approximately is constant to basis, $XXX negatively While we the prior reported will currency million. Relative approximately anticipate revenue on increase our dollar a XX%. guidance, expected impact

COVID-related expanded we $XX impact by negatively Additionally, revenue approximately million. China will the restrictions in now expect

Ukraine, we incorporated As of $XXX in estimated fiscal our the which a impact guidance the reminder, represented approximately million in previously war ‘XX.

Choo in in guidance increasing approximately a on in year currency; approximately we on and basis now X% million, Kors Looking increasing Michael constant and Jimmy constant at currency; increasing basis a revenue revenue by reported full of X% approximately approximately X% approximately assume revenue X% on approximately currency. and XX% approximately $XXX of approximately $X.XXX billion, a reported Versace brand, $X.XXX XX% basis of revenue reported approximately constant billion, and

For ‘XX. margin approximately be the year, to fiscal we now flat will expect gross

ongoing We a of lower expected negative benefits initiatives sales anticipate our positive region houses. margin foreign strategic higher This continue impact from to margin in all to is by the underlying be is across currency. and strength China, offset three which

to In remain addition, through we expect costs the elevated transportation year.

As we operating now a margin XX%. expect full a year result, of approximately

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

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

With around of repurchase we guidance income rate our interest items. and $X are our to anticipate million. share $XXX approximately approximately average shares of repurchases new in certain incorporating and expectations non-operating outstanding of Turning billion tax our $XX net XX%. million anticipate now weighted We effective share authorization,

generate $X.XX a now we approximately As result, to fiscal for ‘XX, representing diluted earnings per expect share of double-digit growth.

to store anticipate Turning openings we $XXX which investments well digital including in as spending our platforms. as remodels million, and includes IT expenditures, capital expenditures, approximately

quarter guidance, X% billion. This constant currency. of increase first anticipate $X.X year an basis approximate now revenue total X% prior an on versus represents and approximate reported a Turning approximately in increase to company we

China approximately in the in first approximately before to down year-over-year improving Additionally, sequentially quarter we in down anticipate the XX%. quarter now second revenue be fiscal will Mainland XX%

For approximately XX% increasing on reported approximately on currency; approximately constant and in revenue basis Jimmy increasing in and Kors on revenue million, a of reported approximately in first X% quarter $XXX of X% $XXX million, million, forecast revenue and and constant by Versace XX% approximately currency. X% basis increasing XX% revenue basis Choo brand, Michael approximately of currency; approximately a reported constant a approximately $XXX we

costs supply anticipate quarter, margin operating contraction. year-over-year resulting a highest will at in chain as first we gross Looking in the be margin, reminder,

XX.X%. revenue well from first margin a we region. expect now now as forecast we China, a as be Additionally, is structurally approximately which will operating greater headwind Therefore, quarter higher FX lower margin

margin In Versace, double-digits. anticipate by operating we terms operating low margin an the for of in brand,

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

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

a record we demonstrate were in share conclusion, margin revenue, and we In to per of the share gross of ‘XX. strategic expect fiscal strength diluted initiatives. now and results pleased of the Capri approximately These per result, our Holdings As earnings $X.XX. achieve earnings brands execution

Looking move forward, to to exchange term, in headwinds, ‘XX, we and of fiscal confident chain we war we despite are expect foreign our revenue per year in and revenue another ability share the challenges, supply beyond the ability The Longer deliver ongoing increases as earnings future record our in resilience $X COVID-related resume the restrictions in Choo as China double-digit revenue Ukraine. as Versace, luxury the and Michael our market of power headwinds. and to the time. in achieve impact and reinforce Kors of well margin a billion XX% operating Jimmy optimism current of proven macro for over

line for the open up will questions. we Now,

Operator

Fargo. proceed comes [Operator line Instructions] question from your Our question. Please of first Wells Boruchow the you. with Thank Ike with

Ike Boruchow

Hey, through of as what guidance move think the on you beyond? maybe just QX, and gave China QX around different, Mainland know brand are in and are into good by your Asia seeing you the of in kind well. morning in real region in I but expectation time are is but what’s I managing and exposures what everyone. then guess, you would macro really context your because for right implied love seeing your some perspective now? what I Congrats some you John, on

John Idol

questions. Good morning, you Ike the and thank for

Just North databases we had luxury you flavor which a strong a products. is good to the world also well our see the American desire you results consumer remains one, our consumer. for indicator brands, I give think growth, quite little can and Number the these of around can as for health across for consumer, very robust all our you three the double-digit houses the think see as from as

impacts about all So are houses to a and we forward are quite the things the how balance luxury the fiscal various consumer. facing quite America in about the we out. go North year. of see reading plays about in as strong lot the of it American Obviously, as the paper all that North consumer But for moment, maybe etcetera feeling to inflation, relates we optimistic have will we of feel that this three through you

Europe, last strong see the two quarters. a we Regarding very over rebound

the say, movement going the are markets positively, to is and truly, fully this brands well from is really go consumer and at bodes reopened going out work I into up As for point back – well occasions all, a social not both that a as for is back would most, areas. of reacting there if those lean there our as addressing different

we feeling are very about that. So good

purchase know, And business in markets. war in Ukraine there. you As Russia. region many the stopped product We impacted our there consumers shipping to have are has in who would other normally traveled from

guidance. our removed we’ve that of revenue all from So

out term to Again, And sure robust. certain now. come as while is think we’re out moment meant happening, And I’d coming there shortly. to out that’s are a impact be the that when how In the an going business for see of not lockdown the Beijing very play going is as there. greatest lockdown longer-term exactly a was rebound. reopening say right is the in to we’re consumer and areas that seeing of raving Asia, Again, the lockdown, that We to so that we and Europe. lot first the buying, Shanghai of is headwind

think this current first that gave we guidance prepared quarter. upcoming a we remarks in our So for

XX%. pretty down down would and are the brands around we will in is I say XX%. just in be feeling it business Our board. it again, that about will And think this the across – be Asia equally almost all of QX, a guess much

is showing that Versace its proportion higher. it much relates bit is China reflecting see up, to higher, because the region to You’ll total as a and

Versace underdeveloped flagship very here opportunity with we’ll in – few be Versace in for to really a business Ginza in a and today provide a and Japan that’s going a have brand-new We nonexistent months. opening almost big for us,

is hundreds literally excited of of opportunity quite us that for for we’re market so about millions And of dollars that. Versace. And

all brand the that the Additionally, the really reset. greatest markets to the be stores fleet positioning Versace, And were effort. of really store needed renovated amount one in repositioning brand where needed the and very number really badly. China, probably China was needed the we the to be very, of

Patrick President at the gentleman that Prior have a that, Kors and build by a a Dior. of previously Michael new was business. little in who the to year, establish helped he role a over We name Lee,

an of of our moved the So bit he’s by back experienced. enormous to those offices Shanghai. pushed initiatives And had amount shutdowns. little We planned a Hong very from Kong – recent there’s to some be

new a now, August. Shanghai flagship in have in maybe opening probably We September

So lot in luxury of enormous total and in represent of activity the all three a you our know, opportunity houses, area. for an Asia China growth. as there’s happening for And

– I and next So of behind competitors once an quarters, two lockdown the to our be steady this still very will very some able it’s we resume have we of and that very are And we’ll enormous grow. very confident say, growth we feel businesses very, that us gets that large and that consumer would over all in the there, region. confident

Ike. question, that for you thank So

Ike Boruchow

Thanks.

Operator

you. Thank

ISI. Please comes question. your next Saad the of Our Omar with question proceed from Evercore with line

Omar Saad

discipline. say is pricing Are but seeing the color. reopened, I be quick margins it guys in your reiterate what this you after evolving approach. kind promotional promotions continue macro could the of like are all about And not? clarification, comes the Michael marketplace that maybe you strong a out of a your of your kind customer kind ASP to of given I indicated in more just China, strategy my to did Chinese on bit around taking to you then of any environment? the for you’re China – and the Maybe of Kors the promotional question And weak, John, back guess, you levels very ask be maybe booming mean promotions you a cautious wanted signs there? Thanks but still brand. a expect lockdowns sounds trends,

to too? Thanks. want clarify Just that,

John Idol

Sure.

for question. First thanks off, good the Omar morning, and

brands all that been for globally, place. promotional quite So prior and we’ve And I and in are we’re great this on we’ve remain us. Choo very pandemic. Versace activity really all the and reduced promotional was successful front, very, Jimmy the set to and across that’s we think emphatic and a set emphatic been

were place completely are business. So didn’t gone. healthy were for that the think whatever activities before now taking we

to Michael to to that. continue upmarket, again, before, And step stepped to pandemic move we the to before as As we’re more start and down continue Michael that the going made through brand the we to raise and further down prices. it Kors beginning truly going Kors, decision, then relates see we you’re the it and pandemic. have

have announcements reinforce which will other Day, – are at during talk we We talk about going some that Investor that. to further

we whatever to So on don’t to leave where holding intend Kors will to to our want own the we that. we American your that on observations, I And has Michael are are, value. think North and we reinforce doing extraordinary competitors intend we participating, brand continue

in to his this come address we have this Tom to also regarding turn inventories. did want our I not opening remarks back. So are far, we looking

elevated know, but you at design that plan. by an inventories is by and As our are level

two So, we things. did

accessories in lesser in much for we Kors Jimmy and Choo, basic First brought a them mainly We our mainly, in and have. footwear products, to we did it’s core thing earlier in and than and and actually degree, we Michael Versace. ever again was both brought

demand, have have call, business inventory, almost product. inventory? out we first every our And that’s we by for larger replenishment you had the had of we more been place that keep heard we in So, have done core the have Well, saying on is years as supply. could weeks we X of

we really shape done our is we good design have calendar. so think be have second in the beginning this we thing quarter. going And changed now And we to are

Kors actually mitigate one going more chain issues. to are the getting time. particular, Michael In are it change products in our we earlier to again and that is We bringing fashion supply

small very of While transportation China certainly again are And moving nowhere our production. improved, and It with they they a with in levels. totally vessels part region. China near things again, are the have that in is things pre-COVID happening impacts just around

factor to out of So like of concerns. would our that we take one

our the We surcharges might and that fuel place. have slightly moving an said take that that, remained that could increase elevated think has we even actually given cost at of level, freight still

kind anniversary XXX% deliveries we’ll fashion in up, design. But will bringing them process best just the bringing mitigate sure of are that’s to make bit once the And a that new again, because trying consumer normalized by that give early. year, we’re again, in earlier, you all a will be and of year that larger comes possible that through we and our see, can a our So core back little service as – bit we’ll experience. on our and is

malls whether there’s correct to tell huge China, taking into business again, say I in said. don’t run we’re conservative approach. whether what to Secondly, back We that regarding pop are shopping and you going the I’d in you’re and a shop. know yes, be some can’t people going

I possibly But difficult business. think the going this we fiscal I things and how openings because on. think year basis. half think most is we’ve as going year that do know again, the just we We as to there’s Again, financial think of we remember March the how closings a very important when And with you XX. will it’s what return been second to our be. We fiscal think think think transparent showing and to but community is flow are open you to We tell. can ends our can’t are for understand do we think we we’re we quarters the approach. prudent that this that and way normalized forecast is taking our realistic in we a

So thank Omar. you very much the for question,

Omar Saad

Thanks color. the for all

Operator

Thank you.

Greenberger question. Please from of with with comes Our Stanley. proceed your line Kimberly the Morgan next question

Kimberly Greenberger

pricing. so this to Thanks on the working Good comments morning. that know I I follow-up Okay. of Great. on part maybe there’s a Michael by in little sounds you longer. to that Maybe brand. your just question more if on pricing Kors. comment at It little answer a still pricing bit wanted the on better think just something you’ve like opportunity John, is Omar’s much. year that for could been your and past you

could of to by further just understand progress your sort just if still numbers on put some go. initiative So pricing you’ve us about or have talk where And then to to made and you the you Kors around know the basis. if XX% grew revenue I’m just I price the full recovery on so in specifically. Michael versus down sold wondering the pricing brand year for break the at Thanks you units the year. could much. brand

John Idol

Kimberly. Sure,

the So with the there’s two Choo started start I’ll Jimmy Choo. different Versace ago. little over conversations. a a year and Jimmy

that frankly, been decision really that point. that just we Colman, we, since may purchased looked Choo landscape underpricing at just particular, led quite historical the luxury were has The the was opening before Jimmy our competitive product. the recall in and made company. price team And Hannah You management we the by we

about two very increases. large have taken We price

season. one we us with another a We for to will just the we have the level is to fall coming luxury that get sit true And believe pricing. where

no seen pushback have on that. We our absolutely consumer from

You on Choo can fire point. Jimmy this the business is see literally at

prices with which Jimmy little it’s fun I hands. the And and sitting having a the at think all your is we teams So and fact Choo’s dress are all and the Choi up right much by of great been into more are. a obviously, led competitors combination designs higher than our Sandra that plays back, glamour

not the that’s think we’ve consumer said, don’t place be. I what the at looks right done and to So

know, power rising almost we are be I as but point the it that again, know happening that’s Jimmy And there’ll opening again, exercise. more at price a won’t next call Maybe consistently. more Choo. luxury Versace, exact large. went year, be So there’ll would, world. it be brands, the of don’t you to I luxury Versace, ongoing. lot something real through Once in the prices again same

there fall We continues in this big season. have Again, somewhat go and as is coming absolutely room Versace. brand moved increases really more first are our the to think price But it’s to get think particular, amount in traction we with definitely tremendous have would relevance opportunity. the there accessories, more as say, getting, the I in that the that we a consumer, we is

We as will the product that make and strategically, customer do do see sure very a we foothold that that we with we really that category. and in have will perform

on it grew I increases, and then market again, grew accessories saw lastly, to in expensive at continued think very XX% the and our X% the on by happened increases You XX%. over by it we enormous luxury range We resonates are and Versace. These during strategic has consistently. X% Kors, Michael Price probably products. just to very that move working And to it’s up initiatives footwear the quarter.

continues luxury the between widen. So where world the delta to Michael is Kors and

we increases. us as out prices that we’ve the But believe during the grown been raise of will to a of less told AUR increases we pathway we’ve answer don’t you, we your price have double-digit question, that’s versus year. part part brand. And really elevate as give taken much to final To has units and So really for that, promotional the sell-throughs continue during higher frankly, quite the full that’s just been price quarter. attitude because posture a

that real the really that of wasn’t the you coming all very three put And touch Kimberly in our question. are consumer. those wouldn’t much, And the the be consumer followings number. brands brand. an databases. building feel again, for with strategic That’s place resonating we kinds with additional again, XX.X engaged the extraordinary all point into new customers think, I we if for Thank we’ve million us that really the initiatives is So for

Kimberly Greenberger

Thanks. forward July. to We in more in look hear

Operator

Thank you.

with Our proceed next question. from Boss question comes line the your JPMorgan. Please of with Matthew

Matthew Boss

Thanks and a quarter. on nice congrats

elaborate that you’re on different So glide light the relative the And the for billion tourism maybe are that and on as just untapped that growth luxury John, and growth travel then path year? embedding Versace stimulus to across you structurally space see prospects, concept? to you just having in are thinking broader the wallet categories, now What and share in target just and or lapped for relates it accessories side, seeing you $X this you for can of shifts the speak maybe pre-pandemic? consumer how about opportunities handbags

John Idol

every beginning come to in for back. wallet started and morning bit the then question, April, a company little thank I the softness Matt. things and of and that think you I Look, during terms stimulus saw Good March, of think little very bit in of the

nicely right very America trending now. North So business in we’re seeing

trillion don’t was more everyone speak time, – savings and that’s the about know how American health much consumer it to I than continues So that at obviously, of of the $X.X pre-pandemic. the in this

up I that and the going they’re most I think of us. bodes dressed thing that, people they’re well is all that for work. going So fact to think, getting are And there out the back bodes the

really for even I and healthy business, it’s in the some business, business. think So footwear it of we’re seeing our ready-to-wear our accessories

levels, quite women’s been that’s during pre-pandemic in had to COVID, we’re not back very business now dress coming there. challenged but very, Our and getting

we’re how a that what into excellent don’t how continue we We Europe the for? I us of before, for as will seeing right said So And But lot certainly, now. giving it’s know. again, again, long is confidence And is growth. healthy forward future. move

I on something in On think, getting significant really growth in the obviously have a sorry, the globe there we XXXX, the prepared basis, digit our next be calendar been travel the We North we don’t had it been would to will a are which in or revenue-wise, particular, going way solid again, that year. our situation. but back front, revenues year, we to Tom’s lesser currency believe the travel will we’ve until year. consumer calendar I’m But XXXX, next in double-digit remarks, currency – the again, happen doubling, for not think rebound ‘XX. that is we return there’s said be year and this fiscal degree, a and believe this And my in still traveling, is constant a American double moving to very will China

with Versace year strong lift positive results. in feeling the on quite And $XXX And and ‘XX be revenue we of calendar we’d we a think can travel you that retail our and about all us. in we’re these real that see be. million, around we we year again, and about of lastly, for that, that are, $X So that billion headwinds. the currency world, you back strong in to in fact of million our the And the coming of it’s excited think the going where kind And that I very, $XXX even face very we we’re add growth. again, you luxury if be see for lost this in about headwinds, then very even can again, thought Versace, ahead positive fact of some see against again, a terms business worth will

And well so think that we goal. on the that achieving to we’re way

team. Emmanuel leave very alumni about September the an Kors the against again, of We’re meantime, it’s be joining Versace. Michael excited with in middle joining He’ll the us. Burger to of us Wilma, In hands in Cedric excellent

$X global haven’t level we we missed can but prepared exactly, it not say there’s Versace. really on So bigger don’t billion is a that names that something other see We Versace. you than that. could beat are again, think be a think at the the some And we’re while only to number on for that And basis. our again, much of with

about are much, remain we really happening and as Versace. excited very accessories thrilled as have you we again, at Matt. Thank been with what’s the So

Operator

you. Thank

from with Our of Goldman with proceed line Please comes Brooke Roach next your question Sachs. question. the

Brooke Roach

provide been thank cost could puts and but and What ground the you so gross other from your for quantify anticipate for this a Good context lockdowns more year. pressures. structural question. on margin our underlying bit level you. And you seeing would the help Thank that you you from can the year the about of more you takes strategic taking improvement initiatives? A love are China little temporary afternoon of and to hear I covered, has to much lot headwinds temporary

Tom Edwards

Hi, here. Thanks your Brooke, it’s Tom for question.

And expect to our ultimately, to see strategic growing to John then And look is to business, Versace. benefit also up and Choo by is benefits increased full continue price is as from certain China tailwind at mentioned, both which significantly margin. normalized the grow and ‘XX initiatives our at become gross that a more brands, accessories and things FY across we course, quarter Jimmy that grow margin. and pricing strong structural margin, begin in to of we driven Asia sell-through as this So and on

supply Some really on of chain the are takes side the costs.

the they compared we’ll not they through high moderate when impact So see year. we expect time first against them prior year, the as were And because the is to begin frame quarter the that to then but remain a the in elevated biggest in it year. through

So are now, many and long important disruptions. there fact. that’s delays still an is Right

watching be closely, the negative to look going that are through we that but is as we year. a very So

On side, is a the leverage SG&A continue we’re we as to store time business. And key that grow looking to productivity. of over the part SG&A

we ‘XX marketing at FY our brands. look we investing are across in As

so ‘XX. And that in we did

course, in to the to in stores pivoting more continue it’s now ‘XX. going the opening critical support that year. are We and of to long-term growth we think We’re

fleet, remarks, and the in million. particularly the of for mentioned as prepared and higher to CapEx for variable renovations on world our as build course, around out continue I Choo Versace half and costs some our new of revenue. As is that stores year Jimmy $XXX About we the is we grow

as you’d just the – we’re looking at see think operating I a margin And overall, then through and the the year now, So progression impact. it largest in of China terms well. as on and the QX gross side right profit is

QX, you that, that do that can but as measured But it more will Shanghai situation. in in the will we China XX% in press, mentioned, reopening, a group. process be and down believe normal John believe after beginning have across As that, be the a still is read the

Operator

you. Thank

proceed Markets. with of question. BMO question Pleas Simeon comes next with your the Our Capital line from Siegel

Simeon Siegel

further? installers? the on impact just comment on growth balance the recognizing maybe inventory understand growth, we it seasonal you for into Thanks. that it us we very – know constraints Thank sales, see the Hi, did at inventory versus just the then, sheet? could dig the you spoke back units And say could EBIT? everyone. that bit, you what you that just regional XXrd help you comment morning. Good much. can I Is sales? Could Tom, when So held about Just to allocation was you week in elaborate a transit look

Tom Edwards

your question. Thanks, Simeon, for

the our impact the up point inventory out sales, was So that on inventory to would year. in I in-transit double

Also, includes number. a it’s nearly that high. not on-hand was you’re So seeing end our as what the quarter sheet on and balance

sales with second our sequentially quarter, expectations perfectly and that of week future our will terms more and of balance impact. million. that the we We it moderate year. was make to and I begin And terms the supporting sure to it and noticed With partners And want are planned how of we was, XXrd to be in this inventory. we consumers. in low in regard the in is think, sales, EPS and for built future that we good the teens in the it, actually sales, of inventory we’re we more towards as portion a something the again, in to pull-forward as mentioned, in we of at expect and building John to and versus building as was quarter remarks, So as use the Again, a noted year end position deliveries be support and as the high that or that core, not was order it more time. of prior most in the towards well similarly available hold end $XX consistent about

Simeon Siegel

Great. Best of Thanks luck a the lot guys. for ahead. year

John Idol

you. Thank

Operator

Thank you.

Our with question from line Jay comes with question. your next UBS. Please proceed Sole the of

Jay Sole

Thank that to capitalize men’s Maybe be you opportunity think go event interested I’m were John, last? it’s see? best you you. dress through maybe Great. you. into do You to this trend how toward brands long will in are positioned this next something party can year Thank year? less about where the talk which on think

John Idol

the Number portion certainly you prior not like wasn’t It to the question, Thank the trend it’s that I Jay. what’s would is – group’s business for larger Two if one, the exciting Yes. things. of about the – and pandemic. the case was.

do called etcetera – that So us MKGO. and towards hit, And I to business business. We dial very Michael would work, going little as for very at sizable to and brands across that going talked luxury all of fortunate able all take pandemic should And to want us. social know, big back our away the casual business. say. product as more to for three healthy certainly I it’s for dressed lean because as And become XX% business of was being weighted going was us that were business, three houses, grow. very you I had Kors much started we in bit prior I’ve up. and we or we much as course, companies that more overall more to note walk dressed wear, calls, more it’s we that was that pandemic, ready of and a It’s piece a and want a on up again, that back account I think really to really from people to say out not that up for a also continues dial large a a the revenue certain about driven luxury of footwear. more a in sneakers something sneaker their the for work, for And very as in previous can to business. at have we It started

we they’re we revenues not when it’s for category. how an Jimmy at our Now total Choo, us quite and look or competitors but at doing are at Versace much that in opportunity levels enormous those

bit path. I year. just of next lift pre-pandemic go the level probably going will all sudden on. of engagement that and Yes, this or of its dress a it up think will little resume that So social of that – a But there’s don’t we have right only and this extra one now level hope this back behind pandemic away could us is

stay. think it’s have enough, think would oddly the I trend I anyway. fashion And think here to changed I

don’t again, in are you men’s again, interesting the the I of work. stays and on very the I positive you’re that’s are certainly feeling not, next more that they see some that always whether quite business trend up to swing think right I know. very that And think I or a of and areas and But that around need of refresh casual through now. a you men back with men’s wear much really been what Jay. that to in their is quite some the see much, trend think and fashion And strong. you coming year – wardrobes as this something It’s is change trends dressed while that’s return definitely Thank again, globe, the strong it’s indicating forth.

Jay Sole

you. Thank

Operator

you. Thank

your from the Barclays. comes question next with Please Adrienne of Our Yih proceed question. line with

Adrienne Yih

Good morning.

very over at of much I both don’t price I are know, looks Let taken? congratulations. the in up, so XX% Pinnacle about elevated. The John, to luxury How point, see already something You fantastic, from into mentioned initial fall, about you pricing price much. guess be launch LV up. are those? they Chanel other my as guys me add my just and with in my Kors, pre-pandemic. your ask are points, into the might particular, are I another layering you Versace product on gap I Those the questions. And Choo that up you price the have question, Pinnacle taking or points accessories, staying Thank and that the wanted where you you

John Idol

question. excellent an It’s Adrienne. you, Thank

again, noted, up opportunity significantly. planned. season. all was as brands need Again, in fall you first three as leather start with the out have absolutely it goods. Versace, not company. a go we bit think leather the in has was little goods create consumer to, to fashion price ready-to-wear company, a a more take did increases This historically the credibility the company So more off, it We will time

we’re I inside stores. construction of think what doing the you can see the of

I we’re doing think the you can marketing. with see what

introduced teams, and know, And very bag group our going and can push. is Luxury, [ph] major, be excited by in need opportunity. enormous one that to new is it enormous, all be business, to click, this and are Donatella major the in was with runway that as about really you a Greca Gatas We the design you

to starting of in we’re Versace. that some things feel we so And happen see these

be on point the And is probably years. that. frankly, a to take But of opportunity And we the to have the pinnacle lower the to get luxury. probably so we do us today time. the middle question price the being call to do the end would we Choo And there’s few Jimmy have more, authority of instead no period opening. Choo do quite hopefully, of I that. always the will were I’ll that a it And a bit will over where think Jimmy we won’t. is, answer little

trajectory probably more way group, the authority and in I’ve of like in accessories, So our biggest little and so lot business. of consistently to think, footwear and work. less do, but little in that got have to some we trend although we challenge the a accessories, that’s do got the least going is We’ve more make the all now a it’s to said in be to go. I probably brands A the the three that,

we’re world. know a We that Kors, a the designer. to a Kors, is. happened distance that want further is part are named we us certain real we’re products from have Although week. do going Michael really lastly, some around really the may are competitors, don’t to – upmarket. things that collection They’re you’re be to certain encouraging. There that in just the day at in differently. with ourselves every who our to us perception last of stores man And going best and Kors the Michael then And to X the And things we mean what Michael look this we change take reside luxury the that months with brand going of of of. quite because we And leads trying we’re

we’re that. to at further some doing Investor hear our what exciting things about Day reinforce You’ll

the we going earlier, And not to much, as And promotional what’s of to it you is Thank we’re so lead part and go upmarket. told very to going more Adrienne. strategy. come, Omar our

Adrienne Yih

That’s helpful.

John Idol

share for growth. fiscal that history And have XXXX. I on I and for year. we growth, are our deliver about our year in strong been a think gross basis fiscal we’ll And reported Again, on digit. little that. going delivered per is company. And constant The will for it the we have would although you we think the highest we a double this mid-single-digit over earnings It We that want revenues, call, double-digit today. all to per a share we margin very its reported company ‘XX very is We basis, positive earnings extremely excited joining went that’s its currency so thank do apologize. be us normally results year-end to bit. another

you So strong we Michael very brands: platform market. a grow continue have believe joining for Versace, in Kors Choo the luxury our us Jimmy we and to today. with Thank to three luxury

Operator

concludes you. conference. today’s Thank This

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

Capri Holdings Limited (CPRI) 1 Jun 222022 Q4 Earnings call transcript