CPRI - Earnings call transcript Q3 2025

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Operator

Greetings, and welcome to the Capri Holdings Limited Third Quarter Fiscal 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Jennifer Davis, Vice President of IR. Please go ahead.

Jennifer Davis

Good morning, everyone, and thank you for joining us on Capri Holdings Limited Third Quarter Fiscal 2025 Conference Call. are Financial Chief Tom and morning Idol; Officer, Edwards. this Chief and Chief me Chairman Executive and John With Operating Officer,

made differ to risks Before that uncertainties that constitute me let actual and we statements on results expect. cause statements to forward-looking subject we may those today's are remind which could call from begin, certain you

assume today's are Those any call. risks today's Investors that filings, in which available the this remain the and statements call should and to the on uncertainties later operative the not undertakes press are during made at update company's release no discussed obligation described time, website. on in company company's will information SEC and a

please non-GAAP the release basis. today non-GAAP To certain costs all measures and impairment restructuring and Tapestry, associated with exclude at costs Inc. noted, reconciliation, our to merger charges, These with related information costs corresponding otherwise transformation other costs, website earlier call GAAP Capri terminated financial implementation a to our charges, will previously ERP review and today's latest measures Unless on on view be capriholdings.com. the related posted earnings presented

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

John Idol

to our on our long-term have remained we and strategic current reevaluated everyone. Jennifer, the at Since our February strategies about and results. good are Thank you, disappointed our agreement, the growth trends Overall, challenged our initiatives morning, improve details and forward quarter, business during plans. with XX. we look of and the merger termination Day future sharing sales We Investor upcoming growth drive to

that will challenged. years path The of are XXXX, are execution, Entering insights us we are still X.X early optimistic because in shaping a about our future. near-term provided past promising valuable stages performance remain with However, our has forward. we the

XXXX, us fiscal we ahead, expect beyond. XXXX to and year to to fiscal in throughout return trends positioning Looking improve growth

in with goods to were more quarter like in softening luxury as decline to detail. Revenue outsized our by turn XX% performance globally our results an third decreased fashion impacted I Now China. would for demand

was program our impacted performance the ongoing further Our our well store wholesale as channel. reductions as by in optimization

At the made reposition Versace missteps our that in results. negatively to particular, our and brands, our of time, in efforts we Michael at number a Kors same impacted

Now by Starting prior looking Versace. to were decreased compared year luxury affected third at by as fashion quarter results revenue in decline brand. trends with the demand XX% for goods. global Revenue

line craftsmanship, of began to the more was in in XXXX, quiet luxury greater trend. which we reposition to with brand luxury on place Additionally, the and fall emphasis

pleased been We repositioning our have with many aspects efforts. of

the double-digit Our have VIC sophisticated consumers responded they have positively grown at to more as a rate offerings.

elimination in as as rates XXXX our well our stores. markdowns the we full-price elevation our of strategy, containment Also, of of our This reduced part as included markdown stores, beginning spring/summer assortment. markdown accessories and overall with end-of-season in rates

has this future in for increased revenue, had a in quarter, While brand the near-term growth. Versace's better the healthier, on full-price channel mid-single AUR sustainable positioning our digits impact

of We efforts. also our in made repositioning some missteps

too removed items. Versace many believed unique the elevating While we assortment, we statement

we Additionally, business. wholesale our on points. entry-level products offerings sales significantly retail price at had impact our more our of luxury reduced significant a This but impacted

to achieve forward, Versace's [indiscernible]. focus fun more will into balance Going injecting we energy of elegant on assortment ideal and the

XXXX. product of more this see flow stores will into You throughout fiscal

offering and with higher pricing a of help to consumers these to introducing a wider architecture, broader sell-throughs. product consumers. will engage our of reviewing after initiatives us drive base Both of luxury appeal we full-price will Furthermore, be

holiday, and were products, For affect accessories able a we to including group of limited sneakers.

broader styles women's to retail accessories inflection luxury playful own in appeal to saw we November, and launched in a our in For consumer bag a channel. example, new positive

our eyewear and businesses. the demand. NBA Sar, of of strength appeared Biggie of growth. Eyewear award-winning the Sabrina to new experience continues the Alexander brand and campaign, indicator consumer both star, Grammy Eyewear Carpenter, strong key fragrance Another basketball generated Versace in success Singer-Songwriter is which

robust continues Our to fragrance growth. deliver business also

quarter highly the Aros our driven by the launch men's Tatum Channing the fragrance successful of featuring latest were face of results Third as campaign. Energy

backdrop brand to consumer energy. and channeled benefit Versace view. luxurious, winter engagement. continued the of strong Los were levels Hotel Moving to of rooms to and Angeles iconic brand in fall campaign, [indiscernible] engagement through collections, which as hallways the from awareness and used of point awareness fashion elevated high its a highlight The

consumer, activities year-over-year place new wholesale communication To our to We incredible holiday, continuing contribute the our Versace For and in potential our the are focused growth. we and realize XX% bag. productivity drive believe product to global the These we this brand. helped of offering blocks in awareness leverage launch growth, database. strong return full to focusing have to returning improving more our Versace's the key business tag on increase store luxury consumer of to on efforts to expanding engagement, initiatives and with a energy including reengage aspirational to building brand giftable items, consumer inject

to Choo. by were results global to fashion impacted for year Moving Jimmy a goods. Revenue decreased prior X% slowdown in luxury compared as demand

Choo's footwear Our remains on product accessories focused Jimmy offering. and further developing strategy casual expanding

category to mix expand In from believe XX% terms continue the can to of today. approximately accessories, XX% we of the

Bodman the in the strong to the seen have Sinch addition performance family. bag, newest We

During digits. sales the women's third accessories channel in performed our up single quarter, high with retail well

also our with expanding the casual response We to assortment. pleased have been

sales channel double in During versus quarter, footwear digits low the increased prior year. casual our third retail

with second curated Jimmy and footwear, Salomon, of featuring Choo accessories brand rates. turning a a capsule In the exceptional series, sell-through to collection achieved Now awareness selection engagement. and animated consumer collection the Japanese October, launched

media, resulting approximately generated in across impressions. million also social significant It engagement XX

playful Kim the festive social a [indiscernible] launched location a For series winter, stage winter in vibrant glamorous Jimmy texture-rich Choo for video decadent a campaign in first of starring interior Paris, Jimmy embodied Choo's holiday the season, La spirit and collection. the also Carmen energy provided [indiscernible].

helped from City the of legacy The million the boutique new for opening which and X brand's drive Avenue over campaign, The the drove views. Madison awareness flagship referenced Sex And cultural

to on in Jimmy our This focus a consumer marketing helped increase contribute continue to database. glamor. year-over-year underpin Our Choo's global XX% initiatives

forward, are to strategies foundational Looking that needed confident Choo. elements have harness and Jimmy fully potential we we of the the

growth, stabilizing engaging focusing on both and and footwear, energizing accelerate loyal business. we improving our wholesale accessories are casual new in and and To consumers, offering store broadening productivity product our

fall compared by reductions plan. fashion in prior a impacted Revenue implementing optimization Now goods XXXX, began we wholesale turning by for due the to demand as the as further comprehensive channel. Michael store to softening Kors. XX% continued to Results luxury globally. were transformation well our decreased year program of In

part signature audience plan, elevate too and appeal price offering attempted As points to for reduced our we of fashion to much this our quickly injecting consumer. while significantly product aim core a too younger to

not alienating Our plan our core traction data analytics and that indicated consumers. and was gaining this consumer feedback

are signature levels, we pricing a the and the refocusing core to assortments more forward, rebuilding adjusting brand, our Going on balanced Michael our align with and Kors product of heritage achieve historical architecture to mix.

higher put These being initiatives achieve are place sell-throughs and AURs. full-price in to

previous the fall product and lead times, the of strategies reflected the plan. Given for holiday our

more to the While will most XXXX. some take become pronounced assortments, changes holiday spring by to we and minor the shape fall begin implemented in the adjustments significant

points the to full rates levels. line styles. an This the holiday, strategically more sell-through key with in we on price led bag realigned of styles increase in several For pricing historical price those to reflect

which to Eyewear of Turning indicators the of eyewear and growth. Michael the brand. to key are fragrance, Kors experience strength continued

evokes our Michael is new first fragrance results this saw launch which the signature sense fragrances. the EuroItalia, and strong growth of This fragrance women's luxury our of expectations. we that Additionally, escape. Kors launch in exceeded introduces of both fragrance men's with with The and

resonates powerful consumers XX% remains as database. engagement. year-over-year evidenced Now by in Michael that turning and to with brand awareness brand increase consumer our Kors a the

heritage by a plans, with of excited our ahead, Looking Michael brand lifestyle. new Jet reconnect the marketing modern dynamic Set we are unveil which the of celebrating interpretation Kors to the

We new in are traveling globe elevating the campaigns vision, luxury the style. destinations our world celebrate showcasing and by around

have Suki and of heritage, evoking launch Jet Michael actress to we month to Michael data return the shot we solid believe the feedback, have underway analytics spring Waterhouse, and over campaign to brand essence to consumer Ibiza build Thanks we the from we are The insights foundation. eager strategies set on Set in our right English to strong the a time. has this and later this features Kors singer and the was gained lifestyle. growth Kors

focusing fashion and and full we Going balance Jet creating price dynamic are stabilizing our exciting offerings, on to compelling modern through productivity product core forward, business. sell-throughs, higher value Set our that renovation our with improving marketing and optimizing plans store optimization heritage, our programs drive between wholesale implementing the new

remain for I several future conclusion, optimistic In reasons. Capri's about

Versace, with Jimmy First, fashion Kors. X we and brands incredible luxury have Choo Michael

globally, we distribution globally upon X,XXX resonate we strong digital with Our with framework to network have deeply retail platform, brands consumers; solid are future. recognized second, locations our a a combined build robust the and for with have luxury

fourth, our which network design global serves team, the we has in Additionally, successfully of at initiatives; do the strength Day. talent implement channel Capri reach workforce Investor to have where financial have our important third, our will to own an stores; as strategies, upcoming dedicated not areas wholesale consumers we management extensive execute our share to we our employees and

and like more turn to the in results Tom future call discuss to I'd our over Now to detail. outlook

Thomas Edwards

quarter, the recognize Overall, we X the and morning, and potential disappointed We good results. our of this with John, luxury challenged true during are does remained houses. that our Thank you, performance our not reflect everyone. business iconic

the plans. we Versace previously the market to and did Kors Since at the more We Investor upcoming detailed Our forward as results reevaluated slowdown on our by plans agreement, the expected. luxury the that impacted were long-term Day. growth by not have place initiatives of our update in strategic put termination as strategic we initiatives fashion our as a and well look Michael in merger providing of some perform overall at

low billion program sales channel, to the initiatives in digits low digits. optimization e-commerce the results revenue overall company more single $X.X in declined well turning the By in as detail. third declined our Total sales of store retail reduce decreased company retail softness teens In low down quarter channel, wholesale revenue channel versus XX% our negatively of to wholesale range. exposure. impact prior to high single-digit our due double impacted prior as total with The year. Now

EMEA, In revenue Americas, geography. by XX%. the Asia, X%. performance revenue decreased XX%. In revenue declined to decreased revenue Turning In

revenue decreased to prior declined Now digits. the decreased Revenue total decreased while sales while teens XX%. Versace looking brand. by compared EMEA in By revenue revenue XX% retail Asia in Global in double low XX%. wholesale declined At Americas performance at XX%, revenue Versace, year. declined geography,

At Revenue compared wholesale total while in EMEA to last By flat X% sales digits. approximately year. to sales XX%. the decreased revenue while teens XX%. while declined revenue high revenue X prior Choo, wholesale decreased revenue decreased By low XX%. Jimmy geography, Americas [ Asia in EMEA to XX%, in declined year, compared the Asia were mid-teens. revenue Global X%, retail sales in increased in Michael At Americas ]%, geography, decreased in revenue decreased year. Kors, declined XX% prior Global while single decreased retail declined

at points total Gross to looking due price XX.X% The prior year. the margin to across basis performance. margin XX company Now sell-throughs primarily declined of lower was group. full decline

Operating as our realize continue program. of cost the $XX expense decreased to million benefits we reduction

XX.X% to expense lower company X% As year. operating was year, percent Total to a primarily compared reflecting was XX.X% revenue, revenue. last compared last XX% margin expense operating on deleverage of

due last negative XX.X% deleverage declines compared year. of negative on across Kors' last year. of The operating to X.X% and compared XX.X% to By X.X% last all Jimmy Michael Choo year, to positive margin brands of X.X% XX.X% operating margin negative operating compared brand, to expense primarily margin revenue. lower were Versace

X.X% tax for Italian tax a third Our due year's XX.X%, reserve in year. of earnings compared the of mix quarter of the the to and the established global last rate quarter rate last lapping was primarily to onetime

million Net income included was share. or losses. $XX of diluted per million $X.XX currency $X.XX This or $XX foreign

associated charges I Jimmy review result on Holdings' results, would growth more intangible adjustments to Versace non-GAAP bill Choo. brand modest of rate that Capri adjusted have the Now briefly P&L earnings were completed we comment with and like accounting and These revenue expectations. noncash and of the impairment the

at both and We continue to Jimmy opportunities Versace believe Choo. long-term in growth the the

$X.XX sheet. Now debt $X.[ quarter ] million XX our $XXX net of turning of in the to resulting balance and billion. ended of cash debt with billion, We

strategic sheet Our cash us the execute flow resources initiatives. provide our generation free strong and balance with to

Looking quarter management. XX% $XXX ongoing at over year, with our reflecting the decrease inventory, we last diligent ended a inventory million,

Now turning to guidance.

future to $XX strategic improve executing decline $XX We a Looking $XXX store growth. impact fourth program million and foreign quarter, and revenue an at approximately early of will headwind XX% are currency new This to the includes current initiatives trends of our million. related the approximately stages from to drive we sales optimization quarter anticipate in closures of our fourth million.

forecast We sales decline mid-teens. fourth quarter retail. at in the will the Looking in

Excluding the and impact the will rate currency decline closures, in store third the quarter to quarter. we fourth at of anticipate foreign retail a sales similar

In approximately XX%. quarterly fourth channel, a $XXX will and brand, forecast our the stabilize decline as wholesale decline quarter decreases we wholesale approximately we greatest We Versace anticipate the the million. anticipate traction. will the channel gain of revenue of By reflect efforts to moderate

currency We $X approximately impact $XXX negatively foreign to revenue approximately million. by expect of Choo million. sales Jimmy

Kors negatively of to by approximately currency revenue $XXX foreign expect We sales and million $X Michael million. impact approximately

million. expect foreign [indiscernible] impact We currency by approximately $XX sales

versus year. quarter forecast to gross We be flat prior approximately margin. gross to Turning margin fourth

operating of reduction a reflects over our global resulting initiatives, consolidation closures, the full in of across $XXX other efficiency for $XX we terms and million a decline office. approximately fourth the The measures including year. In supply back decrease headcount cost and quarter million chain store expenses, of office anticipate reductions, in savings primarily

single-digit operating we negative anticipate margin result, high million. full By fourth the and approximately positive mid-single-digit year fourth we high loss Based approximately Versace billion operating single-digit margin operating income on of $X.X XXXX forecast range margin revenue million range, Michael our operating operating the in quarter in fiscal $XXX forecast an and of As Kors the range. in we $XX expectations, the a in Choo brand, Jimmy of quarter. negative

In expect begin expand. margins to fiscal and to XXXX, revenue stabilize we to

be foreign at preliminary store includes planned as [indiscernible] as approximately This exchange revenue of company our XXXX. currency we $XX from well approximate $XXX Looking fiscal versus expectations, impact from rates to approximate [indiscernible] closures total an negative forecast $X.X billion. excluded an impact million approximately million

It in double for or single positively to offering time reengage fiscal low with We improvement to us and high anticipate decline wholesale will currency, meet sequential revenue align versus digits product is 'XX. better significant will which digits constant a are partners our take our needs the to have That shown collections of this we fashion partners, in design of of they and pricing for terms said, responded consumers to and architecture. our luxury fall product have all the our we in making channel. houses XXXX changes

gradual our gain progression cadence strategic the the year, As we think we of about anticipate initiatives as traction.

revenue anticipate we By Versace million. brand, of approximately $XXX

Choo sales currency foreign revenue approximately approximately expect negatively We by million. million. of Jimmy to $XXX impact $XX

revenue We $XX by expect currency to $X.XX of foreign negatively impact sales approximately approximately million, and Michael Kors billion.

sales currency We expect approximately $XX negatively impact million. foreign to by

gross expect Looking momentum year. with building the gross margin expansion XXXX at we through fiscal margin, modest in [indiscernible]

operating expenses. to Turning

of We approximately expect to expenses new primarily cost million decline $XXX million initiatives. due $XXX to reduction

operating close actions implement additional plan. efficiencies, unprofitable stores, supply and workforce new a costs We to realize back-office reduced optimization are chain taking

and we Choo down in of the slightly range. Kors Michael By As breakeven, low in margin margin brand, approximately a XXXX. Versace margin expect double-digit result, we Jimmy income operating approximately of operating $XXX operating fiscal anticipate million operating

to strategies with place, growth. to we fully Looking to return expect revenue in XXXX, fiscal our

expansion gross In we margin We continued resulting margin modest in potential Versace, conclusion, long-term as about operating Choo the remain initiatives. driven additional expense strategic Michael expansion optimistic also cost and reduction anticipate growth we by for our execute leverage. Jimmy and Kors initiatives

strong deliver over our ability enduring of reinforcing powerful proven and brands to revenue in their confidence time. growth earnings resilience, Our value and

around upcoming We Investor on to our sharing XX. growth our look February Day details forward more strategies at

up for questions. we the Now will open line

Operator

[Operator Instructions]

question Siegel Our BMO is from Markets. with Simeon first Capital

Simeon Siegel

is collective to questions thrilled be but taking you to I'm to it nice again. very sure speak again, our you're

and Anything sell-in seen view you've and noteworthy changed couple a any John, you're So sell-through as of do maybe maybe competitive ago? now promotional environment divergence at that's years versus seeing you or the how wholesale.

into And gross Tom, the guide what Any to margin like then next margin you just thoughts QX. maybe net guidance. expect year the and 'XX for flat debt 'XX on and gross look within

John Idol

to be everybody to excited and speaking back we're And today.

think some excited today, guidance that be representative revenue and should you the forward, talked of these performing. how that more our we're are returns we not I think to clarity future a to lot and profitability but additional with growth share on have brands this XX, company that about levels more guidance as moving to February on strategies we only we

the and I'll The or more start Choo don't competitors. any promotional competitive I European it's landscape, that think first in Versace Jimmy with landscape. less group of

think that the significant I all slowdown we're effects obviously feeling China. of in that

recovery don't on I yet we think the horizon. see And the

fiscal it will lot in sequential half will decline not again, terms it's Michael the improvement, more about be think there significant the of our American in China, of the a conversation the say think in but a the would second more will in of that of happen or then Kors, I a And in still declines less, promotional. particular, year. we there's next year. have think competitors, We do I any

we've choiceful. consumer very I I the months is particular. that's think think really over the X And in past learned what

at down. on be unfortunately, prices where you think and over is raised And that unfortunately, last successful more Michael got previous we the months, AUR the look talked business, I and and then she points had the Kors of would customer about where the XX-plus coming significantly get our out price to had that call to choiceful. promotional was brand. we COVID had When we the the And more we because to buy more

Michael a brand. that the pricing a the know And Kors bit now we in puts she actually, crossover valuation and seeing we're on of where

levels to of we of types And full seen as to historical very And where analytics price we've pricing strongly my our we would sell-throughs we've responded the that. very, our couple see. and the that priced in at inflection an I We like groups handbag consumer have good she seen very prepared we more and said remarks, data that. around -- of insights as a

less So that, in I more any say again, conclusion, I wouldn't think promotional. it's or

think we the -- consumer, I same where, with have and that way, lost by the very I to we different have I a business, was we And product aspirational reasons, Versace consumer of for that a choiceful. consumer. we is that again, which and the Jimmy enough the of didn't one think, of in think bit see for lot Choo,

look to pricing as the referred across our group, architecture. strategic we've So it we as

then changes. a more be sell-through help really we'll more I'll particular, or to will future going Versace that's speak And think we growth. be And to make big going there going And in to price some let balanced choose cords, in piece. Jimmy tweaks. there's few less full wholesale the drive Michael Tom and to revenue

Thomas Edwards

QX, John Simeon, at some about other there. in mentioned, margin, We're takes the gross talk when puts and some you Versace as look markdowns efforts. lower there benefits of you store for if quality and for, are for in seeing revenue

the On this offset. an is was adjusting where that product the strategy prior that, other we for bought hand, and have still in we're pricing that for

So flat in we margin expect the quarter.

gross look architecture. buy do and at As our will that strategy And happen improvement, pricing fiscal 'XX, expect improvement. as margin new the new modest into we we we margin

higher moves that and in higher starting sell-throughs support to through full which see in as expect holiday, will So then more fall higher gross spring margins. we AURs, and and then fully price

year, progression there. So gross overall, we for modest a a improvement. expect And margin the

John Idol

don't I the wholesale I answered Simeon, part think question. the of

one take me just that Let second. for

X by you business, things. if impacted wholesale has our really been So recall,

Kors. and them say would strategy our wholesale and at First, we significant and that with. feeling that raised for impact at changed our was And grow to Michael had not really that, Versace of develop strategies and our I prices right businesses the customers our more

about you're fiscal -- reduced us our think this million particular, Kors, improve was again, we quality sale for in $XXX in and aware Michael distribution a points I reduction year. that of Secondly, that that in to

did we're would into that by that will have season seen to our heading back flow spring that that right We into of finished the this not. we carrying liked But be have are And retail with that. end business forward now. initiative

very as our secondly, taken we've with lines, prepared So and Tom's direction heard the pleased with product are that with have price we our that think shown to first, -- we they wholesale remarks and you've clients architecture. in

upcoming declines we small that wholesale be in see probably year year And And increases. will some slow. the believe of actually in or next will second fact, fiscal the the half flat

partners say in the are here, would it's And planning already with see -- strategy. that Versace coming on so into. our and the Michael we're good Simeon. the to that I you, we're Thank they to we've positioned that feeling nice opportunities both want And them and working lean opportunities making that something Kors progress,

Thomas Edwards

below debt flows $X.X timing approximately year-end in With came to at we forecast -- net QX, I'll still at regard handle spring inventory. expect working the normal we Simeon, working capital cash our $X.X in debt. year-end, of billion billion question. We as buy and

to similar expect year-end we earlier. shared continue we number So a that

is cash For fiscal strong and to our business strong, 'XX, generate flow. expect we free very

business 'XX cash would to data ending I and renovation to invest our our expect of leaves like strategies store Kors. Michael the lower. And for in I'd be that debt approximately $XXX us program drive fiscal plenty begin for analytics things point, this we but to million, invest say at as and in

to So those will of but debt first move priorities, course, continue then forward. reduce the we as are, we

Operator

is Our Guggenheim from next with Partners. Drbul question Bob

Robert Drbul

of around strategic the Versace, initiatives, just just have to plans, mean it's I the declines like around around is question in pricing be in follow Kors cores? reallocation just a around the Or in mentioned. the And I change is on the just that ASP? a of the big of levels then that changes course a the bit little think, spend other with you're more pending. talk going I the you some level dollars AUR, and marketing there I or If up or and I can pricing could you specifically guess reductions

John Idol

question, Thanks Bob. for the

first So Kors. marketing in let me start with the

And a our quite The well to not trying I for something were different heard you good core received the to on that the and, work was So transformation I plan. was reach remarks, company tried we intent me by frankly, customer out us to. strategy think prepared intent. customer in say our that was was think the called

our the customer came did Kors at our us, in After insights, stands this we believe well. analytics, outside as back came Michael really for. -- and and everyone research And some is and said, fact, again, looking consumer we to our data said, what back a Set. about had -- in Jet marketing third also data some said partner very the from that with brand fourth that that's And company it "We totality. most or we term the from large in search very, our companies for you're believe was we

So style, after February looking Jet the reacted really It's at our And work world have new to to back around our all which at that of how and there's lens. it's that data going some to And you're gone celebrate very mantra the and traveling heritage, We've positive. also sentiment we Set. the that. consumer see strategy, looked is around customer done all previous all and through research XX. a that modern is kind in on a

the excited And is think how about to we that. so going we're customer react to

marketing will the -- would I from the in to relates it we've spend be, done what As past. say, different

we're information detail but share to strategies world traveling again, Jet refocus. rather And we not you on out as into our going and Set on we'll this get really XX that I'd that implement lay today, February with heritage the how

price ranges. seen have that the pricing, ultimately too quickly at Again, In certain is wanted and prices elevated consumer we we terms us to that what the be of

the which I brand product. ended negative those the effect, and customer a way to had we discounting on think, obviously price the up get image to and ranges our perceived therefore, so also And -- on

X So actually at we the -- we went secondly, historical we looked looked things. out-the-door look We pricing pricing. at back first. at And

lowering a Kors. strategy, to better discounting. lower we'll prices price the line mean of counterintuitive, next to certain actually close more have good will sell-throughs, the And get AURs and and more better, offering single it good, full that were So in be our better able think parts -- we for And Michael or high which down by elevate best but growth actually flat we to digits year. sounds

gross full-price out we've of strong think recently impact the that bags we shoots and starting we have point we full in. be $XXX, us that's believe, We're sell-throughs. a -- these to shoulder but better to right green very, frankly of the to in discounting And but that's have margins before, X seen also negative will, as that ultimately price had that now. the There in our sell-throughs for I And process speak some result certain particular, will that again, And -- around reduction head in direction higher for as right some us. very we bag you quite mentioned I [indiscernible] will is that that are styles.

then another and just we on [indiscernible], $XXX, a introduced that's which few very past bag, of called LA And weeks, strong that's which the seen satchel the over reception from consumer.

a consumer to But as is of lot a in company. I further times would the well key cetera, about strong because the So like would add et responding. note talk to I think this is, I say we're the and right handbags business. relationship this, and have ready-to-wear that's price we value one we

of will ready-to-wear with come down to that's XX% XX% see purchase probably Michael you're than full to representative drive season. going And has that more we of a retail see in something prices And to those for place activity raised XX% will believe in you're And XX%. you'll that spring the And And the it XX%. in we a area, fall prices season. our that certainly we to be frequent probably consumer do think desires. And footwear. to handbags more actually aware, the they and going consumers style stores on traffic basis as happen

to us It's historical our of back in our pricing store spacing activities. ready-to-wear It's us taking going more help stores. lean drive to change to our levels. not a So of we're into change a just and

Operator

Ike with Our Fargo. is Boruchow next question Wells from

Irwin Boruchow

kind of based we revenue then the move question channel hear question from then I the the guess A dynamics. John. get linearly on obviously, guess Or bumpy in cadence a to everything begin trajectory again. next obviously, into as has been for is, of less should guide, my for bad? a to little Good I'll there's And fourth of me speculation Tom and quarter just for question could the couple we there's year, few I expect I past quarters. I in portfolio, more a able Choo I How be you. a been then follow-up And portfolio? there months ask, the to how would mean, there? have what can around should John. just the for I come sale lumpiness? mean, of about share you're you we you guess, guess thinking Versace editorials and/or are be helpful. Anything envisioning and the

Thomas Edwards

at the I with revenue and the expect up of our next we're through maybe getting price, excluding do slightly reducing to still think spring said, of into as the see for distribution we come selling year the year. sales. And we place see fall/winter impact. FX more to as trajectory them On strategy end and our a and right wholesale, a positive store product and progression the has closure ramp off and also we into buying are starting need flat So 'XX, retail we for for importantly, the seeing tail to right the and in

get we the and to as So into later start then we'd to negative expect year improve the year. wholesale

John Idol

percentage that, could greatest for a I on just impact really in revenue decline again, year, the this -- on is wholesale. the QX for And finishing company of basis the

the in this partners to the worked our we've significant is is channel. relationship last bookings. that able increasing we very decline very, be the wholesale of what and affect of believe our large Again, this in some of We've idea and So wholesale. been with some going to

QX to You'll of that the happen That's and of as strategies see across all of call. we've a into on really we'll will lot and it really that's year talked some about accelerate in And houses next able QX, board. in the today's QX, be our as well. ship that QX X

relates we As it to at assets valuable we're public We looking first our Choo a foremost, are and and in Jimmy value. shareholder we have Versace. always highly assets, X company, and know

that's the have been you a read in speculation lot like We out of marketplace. the

what not to in our parties we're I got where in always again, listen Currently, may build Currently, that we who strategy and are assets. think is to incredible the on interested an interest or we're X strategy going last think not businesses. call, we may have going conversation. these is. always as we've whole, people parts said our to the assets. that's have or interested And X I will

-- is and fashion focus meeting houses. or strategies with all luxury currently on with XX you currently, our not on incredible February our that X is our focus what for growth But are sharing

Operator

[Operator Instructions]

Our Roach from next Sachs. Goldman question with is Brooke

Brooke Roach

you have improve us hoping could expectation understand slightly and on flat excluding was with I to the for Can FX store what positive, are retail within embedded John, assumptions the -- of you some there closures. help to to elaborate most you're of important you that the assuming when impact you're marketing strategies place that to your that plans increases product in and the putting what improvements relative into to? better for traffic visibility core and and like-for-like

John Idol

Thank for your you question.

in houses fall And markets all amazing in retail of X put that again, own So And excited Brooke, the us innovation. very would seen have an say have that's at I thing for buying is where particular, what first the of we're together teams always teams I'm this terms the in product, for product. today. by our product our

to And response they really given have incredible we're what doing.

of good customer. place think here we that we not perfect I than feel at better we in so to to a excite We're this that. time. did going understanding much to what feel have we ago do at that But a sitting need pretty year a And be the we

I'll Secondly, Kors. marketing initiatives, I with think the start Michael and

as work lot done of a and modern research As -- a think heritage externally. in I a under as and said brand. our heritage modern our to we luxury you, going well leveraging And really X we've seen inflection how that houses said, of have all very database with strong being to consumer an That is the growth. our have had interacts you've with the lens internally

So purchasing people there's us. are are growths tremendous from interest and customers from the database our who

specific of lead that to year, let's the We're that we're for it, North at we're more many by that more on our so of less you seeing with in to decline to detail And and our think going the and e-commerce driven bringing at well. our marketing to I that next single-digit each looking our indicator. as very out traffic sites. in presentation be cetera. et we've as our a marketing America, Asia, stores we're flatten of fairly February teams will share what brands So so a seeing call with seen with, present and initiatives good high We're who in XX that how people or will CEOs

good So pricing give Michael I'll We've you we And of pricing again, architecture, are our in example one strong, new more feel Bag. the in early in initiatives launched indications the a The called Versace Kors, very little in good Versace. that I about in we've think, and range. some a that. younger lastly, And and made attitude. its the between, $X,XXX bag is And Tag $XXX then very,

still getting good more and point price luxury reaction so point to a luxury, opening previously, we that. it's very of the that that's were but missing we're a just now balance pricing, And and

The terrific which big line. we've the like to that around Galaxia called previously, that of that strategic product. were sneaker have we in men's terms part missing And short in had issue and $XXX. our level side we had that Versace looked move with of new of Versace. consumer large that a start very more introduced still entry We're what speakers very for going retails for then men's. going are and for on but a in a probably retail our It be to there's waiting in in the going lastly, off to is -- we're well, strategic business a pricing, our aspirational some $X,XXX We've the to as Again, a

what some many were the we the interestingly reduced out-the-door at, in And sell down promotionality in the get gross versus we down think better and the look when because we've fact, from our around in we'll our XXX price of a that points. improve lot selling, those to AUR we in around we're we and cases price actually work trying opening that Versace our some was think done of And some it we up third X,XXX that quarter. And margin. went early enough, EUR EUR did is work we the real some bringing at price to of full

point very, start signature as towards mentioned with that spring out XX%. thing well is, traction the in that's we very, think the the strong particular, there last to the that back can gain believe of business, the latter shape be that Kors to part the we So And come we we up a is Michael reducing And consumer. to going I a around season. which in of that very our Kors then business. strategy Michael I in think want will was we beginning part very We significant get penetration to signature believe a

consumers, cetera, experience drives programs we both really et consumers enhance lot and of loyal stores. around our think, -- the help we That tourists, into will brand. a marketing Kors that, put way Michael think the the the consumers, we

performance Brooke, And got we've low a us some had we help relatively in of that off the So of we XXXX. be that poor to we're lot comps coming think will things, get there. going after

Brooke. and modest, are I expectations our Thank think I achievable. So you, they're think

Operator

is with Our next Chen question from TD Cowen. Oliver

Oliver Chen

earlier. on luxury the quiet mentioned You call

doing with go think you execution. brand helpful, to core versus what your on relative fashion and about full to at as would of with Just Kors outlet about Michael be around too. that or signature and segmentation where price that you're thoughts curious you the want the thoughts Also, evolution that,

John Idol

I ago almost that reposition first opening question brand. because with stated the to Versace we start X in -- want years really my it's started to on that opening think, I Versace our I remarks, as

show luxury Angeles. And history origins we in decision with to out going lean we statement Los that the we made very the Johnny we into and in a Donatella And deeply the very, more a strategy. founded craftsmanship, And quite made of that were when believe and company. our fashion

cleaning are the business. up We Versace

have next as other that things call We we'll of luxury. very brand this highest brand to competing at further we're announcements and make luxury position doing fashion pure on the end some on the a

we're heads and but And painful, It's keeping down. we're the -- we're to strategy. we're going stay staying down that course our keeping on head our

-- all we're full businesses the a in have in in balanced full luxury same structure best very with in of the in price-to-outlet Versace, in believe We and it's Jimmy our we where as and price with whether competitors. Choo outlet centers, sit we sit I brands the centers, our

So Both that's we companies And we're our have tight of right distribution. with think these approximately we the -- distributions. XXX very believe, each. doors

of around to today. we have there's very are you is kind that XXX trend luxury that we with probably networks its keep Ultimately, be quiet company. know still the going that and our over brands that store could closer bought to but time, heads steady question did no well extremely the we're when the place, from quiet the We in down initiative. positioning performing Versace And

I XX% key the you for it's the is VICs, stores. velocity the think and on I over And some call. of up indicators, especially saw our mean us huge inside driving

that the on right, we right of know is She back we where leaning aspirational into the next in we're to if inflection for as the some know to we'll and again, it get the we what going Versace. think year. things start explain And initiatives -- be doing will call, helpful I especially next And that and we our really now right we're we move around see now we're -- we're of you wealthy Versace that we we so thing. other positioning before year at have doing the to some turn we customer, us. an think on throughout doing customer the that And will didn't understand

glamor is on try lot during of our transformation lean at customer of period. and at of Z in which that terms Gen happened a really based to was much look look Kors company look historical and really a to really style more time and at was to The in a the then And Michael more and products its try if lot into It right of the look. strong Michael that you particular, too heavily. that Kors, was

weeks, customer and And things. in next campaigns. at alienated some unfortunately, look the core other over when product, arriving that literally it's our the few the But and marketing and you stores

press Suki the with release. in of pictures our one saw Waterhouse You

it's that's Day. Investor Michael hear seek bring about back to going style, not about to looking probably to glamorous really level Kors is you'll of and we're much -- and what that standout shine that our see which You'll very with be upcoming incredibly at but something

been such to over for consumer the an over brings perspective. We you but an XX a Michael sheek to point have always And may fashion incredible He's offer talent the it for of lost of most that of Michael XX-month time. a period from view, got has lot kind in years.

strong. how is very and I a it's going wants back, engaged great take back highly where company. to he to this on be has Michael think vision it's and

us. you'll again, think channels reduce all store fleet. seen from And quickly us that So our I in you've see

is goal distribution I'd And some distributions the to to get ultimate terms worldwide. that very of of be far frankly, wholesale about won't XXX will than that alignment. stores Our Also, down smaller off say, our our much same. of be quite competitors. in

So concern we're a that ever was going to be there -- was if distributed. company over this

issue. an longer no that's think I

full-price Investor outlet. talked of going the we will concept. February our to XX This XX primarily And be and that we that -- lot in literally starting And about previous about excited XXX stores. the talk as for you at a project right months Day. as we again, full new think our balance the have we're store to going last over I next about renovate of we're our And price speak. about we're to lastly, call, our our stores

Operator

with Our from Citigroup. Paul Lejuez is question next

Paul Lejuez

that number hands the And Tom, then, just seeing is actions of that at felt do, much want to in about? were still business today through you share of kind next to distraction need to you couldn't a to be period, of curious what just motion? from way us. tied you then things And easy you is could we're can you you contributed And if sort how CapEx any leadership and what your the in where level, that take I'm with curious get high thinking want what what if give And some in to that for that last, John, year, just we're went today? any you, holes of a how seeing merger that those? in uncertainty big as you're it

John Idol

lot call the But I'll again, was And question. with per not And comment was effort previous I there of went we've in work start thank And teams and our said as call, into potential management highly distracting a this for energy se merger. a that the preparing and team. really it in the management that. that think on lot you to your for merger. and for

much company time. as highly, would there the about I whatever at some on was was have that say so where working say going to would distracting, highly time and And it's strategies. we just confusion given work be what strategy And our didn't on should longer-term I period of be to I

obviously complement very place X for think we've putting companies we strategies put But at senior drive business. And leadership I the have that that and behind us. going all in team the are our we're to quickly, rebounding to I of think super engaged,

always has get going they're -- there. going how been how about Choo they're Jimmy where think go to to they relatively and clear I

our up to a more we're We'd like to coming few dress high more like a way. happen weddings feeling now. is We'd that trend people heels, but in few right

optimistic. feeling we're So

of Brooke's goes some of before, calendar We'll -- initiatives. year that's particular, end quality strategy, we're back And by some that most year. the this confident start on path that of in we As I Versace feel the just mentioned of anniversary the the sale question. that of to right really the kind anniversary quite we something once to of

that will of beginning fall season. anniversary of Some actually the in

to frankly, make it that, discounting the merger, they're with bear see quickly, bold, to to Versace, biggest our quite changes say vision that particularly So ending with take analytics fruit where make more gave use guide insights confidence move, use it And to Michael Kors, then of I'd us to level and the not the data consumer to going lastly, had and start And that's place. of will the really consumer us It us. as happening. us. strategy and the channel Michael's guide full-price understands we think make that much it for

lastly, And lost global They people very say leadership, this about handbags of we're wholesale traction or put answer are dedication we've have you and few merger. the the between to And reaction any And place. during of good the to had thank the then anything have terms early feeling if little getting shoots I consumer that company. we talked lead on the of in in again, our we green tiny is that or that indicators, some the initiatives teams. some about to a

us. us of 'XX, they critical But towards sauce the in particular, implementing that growth to in And we I'll will forward we that over fiscal for other growth as happen secret to hopefully, to turn for as 'XX. returning part teams your will making operating be questions. in be moving move revenue our and that we'll it earnings to Tom believe be,

Thomas Edwards

next and the 'XX, stores. Paul, And support our same beginnings CapEx, of year, for the expect the -- systems for spend fiscal in this at program about store we Michael regarding CapEx, will approximately that's year, to limited $XXX range. and we're million for Kors openings store looking that -- for renovation

analytics. year, Some and then And closing opening more next expect year very over approximately be we'll next we'll areas focused like store XX. be year, investing to XXX, many than data closing close after stores we in openings. e-commerce also this We're

it's same So the approximately year-over-year.

Operator

from Advisory question Telsey Telsey Group. Dana is with Our next

Dana Telsey

other that store by what changes are or that thinking the price you're and are it thinking about customer new you're it closing. that to business how mentioning, are as you spend you're retail And As there when are about looking in that just in about at gauge brand? you -- acquisition you terms targeting you about on, think marketing progresses. versus Tom, metrics the John, how of investing, opening of the you any you're think And terms outlet full going were

John Idol

our technology the Tom, capabilities. We and our to Dana, me particular, e-commerce was hundreds in data of invest with our start the was in We're few to So and to on over and our last going of millions continue -- Tom spent inside analytics correct. let our stores and CapEx, upgrades of company. years dollars

we're to company as have there. very really forward the because And the spend going X in a the less past just to good so into of And and position a amount going of brought we over we're that X.X, percentage effort years. technology

going some XX we one; number two, So stores we number that, good to next about close year. feel are

of The the And stores. again, and a that outlet Michael of price very we and will full balance Kors full-price those price majority good be will between have majority we, full stores. be think stores those

going opening to next not work and this looking are in And new and We once closures, across the stores, really end hard fleet should that will Tom's most distribution -- of that flat very have we outlet and densities my year the said to few of so remarks we've which next will inside have. year over by store at next fiscal we're looking be we're our that -- finish productivities really at we and group, the the store count we years. today remain prepared the we're

some -- wanted days, I renovations. are the early majority our are you is by point we you'll the the make And we're when see so around early that of And encouraged stores will concept, and place at actually it's store by to presentation, results of store but encouraged there. our go that CapEx the taking those new to

And CapEx the Versace we've of really into go inside so more a put our in technology we'll investment the more investment IT particular, outsized been retail into will last where X going and in -- years fleet. as over the then to store Michael we into we've now Kors we're company and fleets, fleet, renovated most

XX% Jimmy renovated, probably the It's choose same. about

And can I we're tactics the of results be we we're of lens for a on between sharing too in store target what going Day even forward very looking and much Dana, X% around to as how And with initiatives longer-term our of joining earnings as we're revenue with our more then piece everyone our interesting the because company to marketing. leave higher of brand, share look we very It to would strategic call And we would the to that can without fleet. we're of our will different lastly, X% much. depending really market the to some Michael that of seeing forthright see our We but XX on to did our the we marketing that spend, we initiatives certain at that Kors depending you Investor this on on be additionally, majority the So investment forth. rather go through terms strategies. guidance putting like spending than how we speaking and Thank about longer-term as definitely operating longer-term today. February I to we this than thank year. And you you you some on will past growth. us competitors, return have

Operator

today's concludes This conference.

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

Capri Holdings Limited (CPRI) 5 Feb 252025 Q3 Earnings call transcript