Capri Holdings Limited Announces Fourth Quarter and Full Year Fiscal 2024 Results

Rhea-AI Summary

Capri Holdings (NYSE:CPRI) reported its Q4 and full-year fiscal 2024 results, ending March 30, 2024. Total revenue declined 8.4% YoY to $1.223 billion, with a 7.9% decrease in constant currency. Adjusted EPS was $0.42. The retail channel saw mid-single-digit declines, while wholesale revenue dropped by high teens, influenced by weakened global demand for luxury fashion goods. Gross profit was $767 million at a margin of 62.7%, down from 64.9% last year.

Net loss reached $472 million, or $(4.03) per share, impacted by non-cash impairments. Adjusted net income was $50 million, or $0.42 per share. Cash flow from operations was $44 million, with free cash flow showing a $6 million outflow. For the full year, cash flow from operations totaled $309 million.

The Federal Trade Commission (FTC) has filed a lawsuit to block Capri's acquisition by Tapestry, which Capri plans to contest. No financial guidance was provided due to the pending merger.

Positive

• Capri Holdings added 11.6 million new consumers, a 14% increase YoY.
• Full-year cash flow from operations was $309 million.
• Michael Kors’ global database grew by 9 million new consumers, a 13% increase.
• Versace’s global database grew by 1.9 million new consumers, a 30% increase.

Negative

• Q4 revenue decreased by 8.4% YoY to $1.223 billion.
• Gross profit margin decreased to 62.7% from 64.9% last year.
• Net loss of $472 million, or $(4.03) per share, due to non-cash impairments.
• Retail sales experienced a mid-single-digit decline.
• Wholesale revenue fell by high teens amid weaker global demand.
• Adjusted operating margin dropped to 6.4% from 9.1% last year.
• Adjusted net income fell to $50 million, or $0.42 per share, from $121 million, or $0.97 per share.
• Versace’s revenue decreased by 3.6%, with an operating margin decline to 0.4% from 5.1%.
• Jimmy Choo’s revenue dropped by 9.3%, with an operating margin decline to (5.8)% from (4.6)%.
• Michael Kors’ revenue declined by 9.7%, with an operating margin decrease to 14.1% from 16.2%.

Insights

Financial Analyst

The latest financials of Capri Holdings Limited highlight several important takeaways for investors. The 8.4% decline in revenue compared to last year, alongside a notable decrease in gross profit margin from 64.9% to 62.7%, underscores the impact of a broader softening demand in the luxury fashion market. This trend is reflected across all three product lines: Versace, Jimmy Choo and Michael Kors, with revenue declines ranging from 3.6% to 9.7% and reduced operating margins.

Interestingly, despite these financial challenges, the brands collectively added 11.6 million new consumers, showcasing their enduring brand equity. From a strategic perspective, Capri Holdings' intention to proceed with the controversial merger with Tapestry could offer long-term benefits such as resource optimization and market expansion. However, the FTC's lawsuit introduces uncertainty, potentially delaying or jeopardizing the anticipated synergies.

In the short term, the financial outlook remains cautious. Investors should closely monitor the company's ability to address demand challenges and navigate the legal hurdles related to the merger. Additionally, the decrease in net inventory by 18.4% and the normalization expectation for free cash flow in fiscal 2025 could provide some positive momentum going forward.

Given the mixed signals, with significant immediate challenges but potential long-term strategic gains, investors should adopt a balanced view.

Market Research Analyst

The performance of Capri Holdings should be seen within the context of the broader luxury fashion market dynamics. The observed softening demand globally can be attributed to several macroeconomic factors, including economic uncertainties and changing consumer preferences. The disparate regional performance with sequential improvements in the Americas and EMEA, contrasted by slowing trends in Asia, indicates differing economic recoveries and consumer behavior across geographies.

A critical point here is the company’s strategic focus on leveraging its digital and data capabilities. The addition of 11.6 million new consumers to its database underlines the importance of data-driven marketing and customer engagement in maintaining brand relevance and driving future growth. The potential merger with Tapestry emphasizes further consolidation in the luxury fashion sector, aiming to enhance competitive positioning through increased scale and operational synergies.

However, the FTC's intervention poses a significant uncertainty. If the merger is blocked, Capri Holdings may need to reassess its growth strategies independently, which could lead to additional costs and strategic realignments. Investors should consider these variables, understanding that the market landscape is poised for further evolution, driven by consumer trends and regulatory developments.

Legal Expert

The ongoing legal challenge from the FTC regarding the merger between Capri Holdings and Tapestry introduces a noteworthy risk factor. The FTC's lawsuit, described as 'unprecedented,' suggests a rigorous regulatory scrutiny which could delay or even prevent the merger. Capri Holdings' argument highlights the competitive nature of the luxury fashion industry, with a wide choice for consumers and low barriers to entry.

If Capri and Tapestry can successfully argue their case, this merger might proceed, potentially leading to significant synergies and enhanced market competitiveness. However, the legal battle could also incur substantial costs and operational distractions. The outcome will likely hinge on demonstrating that the merger won't reduce market competition, a challenging task given the current regulatory environment.

For investors, this legal challenge underscores the importance of regulatory risk in strategic business decisions. The merger's success could bring long-term benefits, but the immediate uncertainty should be factored into investment decisions.

LONDON--(BUSINESS WIRE)-- Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results for the fourth quarter and full year fiscal 2024 ended March 30, 2024.

(Photo: Business Wire)

Fourth Quarter Fiscal 2024 Highlights

• Revenue decreased 8.4% on a reported basis and 7.9% in constant currency
• Adjusted operating margin of 6.4%
• Adjusted earnings per share of $0.42

John D. Idol, the Company’s Chairman and Chief Executive Officer said, "Overall, we were disappointed with our results as performance in the fourth quarter continued to be impacted by softening demand globally for fashion luxury goods. In our retail channel, sales trends improved sequentially in the Americas and EMEA while trends slowed in Asia. In our wholesale channel, sales remained challenged."

Mr. Idol continued, "Versace, Jimmy Choo and Michael Kors continued to resonate with consumers as evidenced by the 11.6 million new consumers added across our databases, representing 14% growth versus last year. This reflects the strong brand equity and enduring value of our three iconic houses. Looking forward, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across each of our luxury houses."

Mr. Idol concluded, “Last August Capri Holdings announced that we entered into a definitive agreement to be acquired by Tapestry. In April, the FTC filed an unprecedented lawsuit to block the proposed transaction. We strongly disagree with the FTC's decision and firmly believe in the merits of this acquisition. The market realities, which the government’s challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition. Tapestry and Capri operate in the fiercely competitive and highly fragmented global fashion luxury industry. Consumers have hundreds of handbag choices at every price point across all channels, and barriers to entry are low. As we previously stated, Capri intends to vigorously defend this case in court alongside Tapestry and we look forward to the successful completion of the pending acquisition. This combination will deliver value to our shareholders as well as provide new opportunities for our dedicated employees around the world as Capri Holdings becomes part of a larger and more diversified company. By joining with Tapestry, our brands will have greater resources and capabilities to accelerate the expansion of their global reach while preserving their unique DNA.”

Fourth Quarter Fiscal 2024 Results

Financial Results and non-GAAP Reconciliation

The Company’s results are reported in this press release in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and on an adjusted, non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information is provided at the end of this press release.

Overview of Capri Holdings Fourth Quarter Fiscal 2024 Results

• Total revenue of $1.223 billion decreased 8.4% compared to last year. On a constant currency basis, total revenue decreased 7.9%. Total company retail sales declined in the mid-single-digits with trends being impacted by softening demand globally for fashion luxury goods. In wholesale, revenue decreased in the high-teens driven by softer demand in the Americas and EMEA.
• Gross profit was $767 million and gross margin was 62.7%, compared to $867 million and 64.9% in the prior year. Adjusted gross profit was $767 million and adjusted gross margin was 62.7%, compared to $863 million and 64.6% in the prior year. Gross profit margin decreased relative to prior year primarily driven by lower full price sell-throughs.
• Loss from operations was $543 million and operating margin was (44.4)% compared to loss from operations of $40 million and operating margin of (3.0)% in the prior year primarily due to non-cash impairments. Adjusted income from operations was $78 million and operating margin was 6.4%, compared to $121 million and 9.1% in the prior year. The decline in adjusted operating margin primarily reflects lower gross margin and expense deleverage on lower revenue.
• Net loss was $472 million, or $(4.03) per diluted share, compared to net loss of $34 million, or $(0.28) per diluted share, in the prior year, impacted by non-cash impairments. Adjusted net income was $50 million, or $0.42 per diluted share, compared to $121 million, or $0.97 per diluted share, in the prior year.
• Net inventory at March 30, 2024 was $862 million, an 18.4% decrease compared to the prior year.
• Cash flow from operating activities for the fourth quarter was an inflow of $44 million, while free cash flow was an outflow of $6 million. This result was well below our expectations reflecting lower operating results, higher working capital usage and higher cash taxes.
• For the full year cash flow from operating activities was an inflow of $309 million, while free cash flow was an inflow of $120 million. This includes approximately $130 million of spending on transformation initiatives that are largely complete. It also includes the negative impact of over $200 million related to accounts payable, accrued expenses and prepaid expenses as well as higher cash taxes paid.
• Capri Holdings anticipates free cash flow to normalize in Fiscal 2025.
• Cash and cash equivalents totaled $199 million, and total borrowings outstanding were $1.723 billion, resulting in net debt of $1.524 billion.

Versace Fourth Quarter Fiscal 2024 Results

• Versace revenue of $264 million decreased 3.6% on a reported basis and 2.9% on a constant currency basis driven primarily by softening demand globally for fashion luxury goods. Retail sales increased mid-single-digits while wholesale revenue decreased double-digits. Revenue in the Americas declined 1%, while revenue in EMEA decreased 11% and revenue in Asia increased 6%. Versace’s global database increased by 1.9 million new consumers, representing 30% growth over the last year.
• Versace operating income was $1 million and operating margin was 0.4% compared to an operating income of $14 million and operating margin of 5.1% in the prior year. The decline in operating margin rate was primarily due to lower full price sell-throughs and expense deleverage on lower revenue.

Jimmy Choo Fourth Quarter Fiscal 2024 Results

• Jimmy Choo revenue of $137 million decreased 9.3% on both a reported and constant currency basis driven primarily by softening demand globally for fashion luxury goods. Retail sales decreased low-single-digits while wholesale revenue decreased double-digits. Revenue in the Americas declined 9%, while revenue in EMEA decreased 6% and revenue in Asia declined 14%. Jimmy Choo’s global database increased by 0.7 million new consumers, representing 12% growth over the last year.
• Jimmy Choo operating loss was $8 million and operating margin was (5.8)%, compared to an operating loss of $7 million and operating margin of (4.6)% in the prior year. The decline in operating margin rate was primarily due to lower full price sell-throughs and expense deleverage on lower revenue.

Michael Kors Fourth Quarter Fiscal 2024 Results

• Michael Kors revenue of $822 million decreased 9.7% on a reported basis and 9.2% on a constant currency basis. The decline versus prior year was primarily attributable to softening demand globally for fashion luxury goods. Retail sales declined in the high-single-digits while wholesale revenue decreased double-digits. Revenue in the Americas declined 9%, while revenue in EMEA decreased 7% and revenue in Asia declined 16%. Michael Kors’ global database increased by 9.0 million new consumers, representing 13% growth over the last year.
• Michael Kors operating income was $116 million and operating margin was 14.1%, compared to operating income of $147 million and operating margin of 16.2% in the prior year. The decline in operating margin rate was primarily related to lower full price sell-throughs and expense deleverage on lower revenue.

Outlook

As previously stated, given the pending merger transaction of Capri Holdings Limited by Tapestry, Inc., the Company does not intend to provide financial guidance.

Use of Non-GAAP Financial Measures

Constant currency effects are non-GAAP financial measures, which are provided to supplement our reported operating results to facilitate comparisons of our operating results and trends in our business, excluding the effects of foreign currency rate fluctuations. Because we are a global company, foreign currency exchange rates may have a significant effect on our reported results. We calculate constant currency measures and the related foreign currency impacts by translating the current year’s reported amounts into comparable amounts using prior year’s foreign exchange rates for each currency. All constant currency performance measures discussed below should be considered a supplement to and not in lieu of our operating performance measures calculated in accordance with U.S. GAAP. Additionally, this earnings release includes certain non-GAAP financial measures that exclude certain costs associated with restructuring and other charges, ERP implementation costs, COVID-19 related expenses, war in Ukraine related costs, Capri transformation costs, costs related to the pending merger transaction with a wholly-owned subsidiary of Tapestry, Inc. (the "Merger") and long-lived asset impairments. The Company uses non-GAAP financial measures, among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. The Company believes that excluding these items helps its management and investors compare operating performance based on its ongoing operations. While the Company considers the non-GAAP measures to be useful supplemental measures in analyzing its results, they are not intended to replace, nor act as a substitute for, any amounts presented in its consolidated financial statements prepared in conformity with U.S. GAAP and may be different from non-GAAP measures reported by other companies.

About Capri Holdings Limited

Capri Holdings is a global fashion luxury group consisting of iconic, founder-led brands Versace, Jimmy Choo and Michael Kors. Our commitment to glamorous style and craftsmanship is at the heart of each of our luxury brands. We have built our reputation on designing exceptional, innovative products that cover the full spectrum of fashion luxury categories. Our strength lies in the unique DNA and heritage of each of our brands, the diversity and passion of our people and our dedication to the clients and communities we serve. Capri Holdings Limited is publicly listed on the New York Stock Exchange under the ticker CPRI.

Forward Looking Statements

This press release contains statements which are, or may be deemed to be, “forward-looking statements.” Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Capri about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. All statements other than statements of historical facts included herein, may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions, which could cause actual results to differ materially from those projected or implied in any forward-looking statements, including regarding the pending Merger. These risks, uncertainties and other factors include but are not limited to, our ability to respond to changing fashion, consumer traffic and retail trends; fluctuations in demand for our products; high consumer debt levels, recession and inflationary pressures; loss of market share and increased competition; reductions in our wholesale channel; the impact of the COVID-19 pandemic, or other unforeseen epidemics, pandemics, disasters or catastrophes; levels of cash flow and future availability of credit; Capri's ability to successfully execute its growth strategies; departure of key employees or failure to attract and retain highly qualified personnel; risks associated with operating in international markets and global sourcing activities, including disruptions or delays in manufacturing or shipments; the risk of cybersecurity threats and privacy or data security breaches; extreme weather conditions and natural disasters; general economic, political, business or market conditions; acts of war and other geopolitical conflicts; the outcome of the U.S. Federal Trade Commission's lawsuit attempting to block the pending Merger, the occurrence of any other event, change or other circumstances that could give rise to the termination of the merger agreement entered into in connection with the pending Merger; the risk that the parties to the merger agreement may not be able to satisfy the conditions to the pending Merger in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the pending Merger; the risk that any announcements relating to the pending Merger could have adverse effects on the market price of Capri's ordinary shares; the risk of any unexpected costs or expenses resulting from the pending Merger; the risk of any litigation relating to the pending Merger; the risk that the pending Merger could have an adverse effect on the ability of Capri to retain and maintain relationships with customers, suppliers and other business partners and retain and hire key personnel and on its operating results and business generally, as well as those risks that are outlined in Capri’s disclosure filings and materials, which you can find on http://www.capriholdings.com, such as its Form 10-K, Form 10-Q and Form 8-K reports that have been filed with the SEC. Please consult these documents for a more complete understanding of these risks and uncertainties. Any forward-looking statement in this press release speaks only as of the date made and Capri disclaims any obligation to update or revise any forward-looking or other statements contained herein other than in accordance with legal and regulatory obligations.

 

SCHEDULE 1

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share and per share data) (Unaudited)
		Three Months Ended								Fiscal Years Ended
		March 30, 2024				April 1, 2023				March 30, 2024				April 1, 2023
Total revenue		$	1,223			$	1,335			$	5,170			$	5,619
Cost of goods sold			456				468				1,831				1,895
Gross profit			767				867				3,339				3,724
Total operating expenses			1,310				907				3,580				3,045
(Loss) income from operations			(543	)			(40	)			(241	)			679
Other income, net			(1	)			(1	)			(1	)			(3	)
Interest (income) expense, net			(6	)			11				6				24
Foreign currency loss			21				20				37				10
(Loss) income before (benefit) provision for income taxes			(557	)			(70	)			(283	)			648
(Benefit) provision for income taxes			(85	)			(37	)			(54	)			29
Net (loss) income			(472	)			(33	)			(229	)			619
Less: Net income attributable to noncontrolling interests			—				1				—				3
Net (loss) income attributable to Capri		$	(472	)		$	(34	)		$	(229	)		$	616
Weighted average ordinary shares outstanding:
Basic			117,156,327				123,327,209				117,014,420				132,532,009
Diluted			117,156,327				123,327,209				117,014,420				134,002,480
Net income (loss) per ordinary share:
Basic		$	(4.03	)		$	(0.28	)		$	(1.96	)		$	4.65
Diluted		$	(4.03	)		$	(0.28	)		$	(1.96	)		$	4.60

SCHEDULE 2

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except share data) (Unaudited)
		March 30, 2024				April 1, 2023
Assets
Current assets
Cash and cash equivalents		$	199			$	249
Receivables, net			332				369
Inventories, net			862				1,057
Prepaid expenses and other current assets			215				195
Total current assets			1,608				1,870
Property and equipment, net			579				552
Operating lease right-of-use assets			1,438				1,330
Intangible assets, net			1,394				1,728
Goodwill			1,106				1,293
Deferred tax assets			352				296
Other assets			212				226
Total assets		$	6,689			$	7,295
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable		$	352			$	475
Accrued payroll and payroll related expenses			107				154
Accrued income taxes			64				73
Short-term operating lease liabilities			400				429
Short-term debt			462				5
Accrued expenses and other current liabilities			310				314
Total current liabilities			1,695				1,450
Long-term operating lease liabilities			1,452				1,348
Deferred tax liabilities			362				508
Long-term debt			1,261				1,822
Other long-term liabilities			319				318
Total liabilities			5,089				5,446
Commitments and contingencies
Shareholders’ equity
Ordinary shares, no par value; 650,000,000 shares authorized; 226,271,074 shares issued and 116,629,634 outstanding at March 30, 2024; 224,166,250 shares issued and 117,347,045 outstanding at April 1, 2023			—				—
Treasury shares, at cost (109,641,440 shares at March 30, 2024 and 106,819,205 shares at April 1, 2023)			(5,458	)			(5,351	)
Additional paid-in capital			1,417				1,344
Accumulated other comprehensive income			161				147
Retained earnings			5,479				5,708
Total shareholders’ equity of Capri			1,599				1,848
Noncontrolling interest			1				1
Total shareholders’ equity			1,600				1,849
Total liabilities and shareholders’ equity		$	6,689			$	7,295

SCHEDULE 3

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES CONSOLIDATED SEGMENT DATA ($ in millions) (Unaudited)
				Three Months Ended								Fiscal Years Ended
				March 30, 2024				April 1, 2023				March 30, 2024				April 1, 2023
Revenue by Segment and Region:
Versace		The Americas		$	87			$	88			$	338			$	408
		EMEA			105				118				444				468
		Asia			72				68				248				230
Versace Revenue					264				274				1,030				1,106
Jimmy Choo		The Americas			41				45				176				196
		EMEA			58				62				266				255
		Asia			38				44				176				182
Jimmy Choo Revenue					137				151				618				633
Michael Kors		The Americas			519				571				2,298				2,616
		EMEA			189				203				791				819
		Asia			114				136				433				445
Michael Kors Revenue					822				910				3,522				3,880
Total Revenue				$	1,223			$	1,335			$	5,170			$	5,619
(Loss) Income from Operations:
Versace				$	1			$	14			$	25			$	152
Jimmy Choo					(8	)			(7	)			3				38
Michael Kors					116				147				634				868
Total segment income from operations					109				154				662				1,058
Less: Corporate expenses					(65	)			(62	)			(275	)			(233	)
Restructuring and other charges					(30	)			(5	)			(33	)			(16	)
Impairment of long-lived assets					(549	)			(130	)			(575	)			(142	)
Merger related costs					(8	)			—				(20	)			—
Impact of war in Ukraine					—				—				—				3
COVID-19 related charges					—				3				—				9
Total (Loss) Income from Operations				$	(543	)		$	(40	)		$	(241	)		$	679
Operating Margin:
Versace					0.4	%			5.1	%			2.4	%			13.7	%
Jimmy Choo					(5.8	)%			(4.6	)%			0.5	%			6.0	%
Michael Kors					14.1	%			16.2	%			18.0	%			22.4	%
Capri					(44.4	)%			(3.0	)%			(4.7	)%			12.1	%

SCHEDULE 4

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES SUPPLEMENTAL RETAIL STORE INFORMATION (Unaudited)
		As of
Retail Store Information:		March 30, 2024				April 1, 2023
Versace			236				223
Jimmy Choo			234				237
Michael Kors			769				812
Total number of retail stores			1,239				1,272

SCHEDULE 5

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES CONSTANT CURRENCY DATA (In millions) (Unaudited)
		Three Months Ended								% Change
		March 30, 2024				April 1, 2023				As Reported			Constant Currency
Total revenue:
Versace		$	264			$	274			(3.6	)%		(2.9	)%
Jimmy Choo			137				151			(9.3	)%		(9.3	)%
Michael Kors			822				910			(9.7	)%		(9.2	)%
Total revenue		$	1,223			$	1,335			(8.4	)%		(7.9	)%

		Fiscal Years Ended								% Change
		March 30, 2024				April 1, 2023				As Reported			Constant Currency
Total revenue:
Versace		$	1,030			$	1,106			(6.9	)%		(7.9	)%
Jimmy Choo			618				633			(2.4	)%		(3.0	)%
Michael Kors			3,522				3,880			(9.2	)%		(9.5	)%
Total revenue		$	5,170			$	5,619			(8.0	)%		(8.4	)%

SCHEDULE 6

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except share and per share data) (Unaudited)
		Three Months Ended March 30, 2024
		As Reported				Impairment of Assets(1)				Restructuring and Other Charges (2)				ERP Implementation (3)				Capri Transformation(4)				Merger Costs				As Adjusted
Gross profit		$	767			$	—			$	—			$	—			$	—			$	—			$	767
Operating expenses		$	1,310			$	(549	)		$	(30	)		$	(5	)		$	(29	)		$	(8	)		$	689
Total (loss) income from operations		$	(543	)		$	549			$	30			$	5			$	29			$	8			$	78
Foreign currency loss		$	21			$	—			$	—			$	—			$	—			$	—			$	21
(Loss) income before (benefit) provision for income taxes		$	(557	)		$	549			$	30			$	5			$	29			$	8			$	64
(Benefit) provision for income taxes		$	(85	)		$	86			$	7			$	1			$	4			$	1			$	14
Net (loss) income attributable to Capri		$	(472	)		$	463			$	23			$	4			$	25			$	7			$	50
Weighted average diluted ordinary shares outstanding			117,156,327																								118,221,490
Diluted net (loss) income per ordinary share - Capri		$	(4.03	)		$	3.93			$	0.20			$	0.04			$	0.22			$	0.06			$	0.42

____________________
(1)		Asset impairment charges primarily relate to the impairment of the Jimmy Choo Retail and Wholesale reporting units goodwill and Versace and Jimmy Choo brand intangible assets, as well as the impairment of certain operating lease right-of-use assets.
(2)		Amounts impacting operating expenses primarily relate to Global Optimization Plan costs, equity awards associated with the acquisition of Gianni Versace S.r.l and severance expenses incurred during the fourth quarter.
(3)		Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(4)		The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure. During Fiscal 2024, the remaining transformation projects were paused due to the pending Merger and we will reassess this program, along with related timing, in Fiscal 2025.

SCHEDULE 7

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except share and per share data) (Unaudited)
		Fiscal Year Ended March 30, 2024
		As Reported				Impairment of Assets(1)				Restructuring and Other Charges (2)				ERP Implementation (3)				Capri Transformation(4)				Merger Costs				As Adjusted
Gross profit		$	3,339			$	—			$	—			$	—			$	—			$	—			$	3,339
Operating expenses		$	3,580			$	(575	)		$	(33	)		$	(18	)		$	(113	)		$	(20	)		$	2,821
Total (loss) income from operations		$	(241	)		$	575			$	33			$	18			$	113			$	20			$	518
Foreign currency loss		$	37			$	—			$	(17	)		$	—			$	—			$	—			$	20
(Loss) income before (benefit) provision for income taxes		$	(283	)		$	575			$	50			$	18			$	113			$	20			$	493
(Benefit) provision for income taxes		$	(54	)		$	92			$	11			$	4			$	23			$	4			$	80
Net (loss) income attributable to Capri		$	(229	)		$	483			$	39			$	14			$	90			$	16			$	413
Weighted average diluted ordinary shares outstanding			117,014,420																								118,057,806
Diluted net (loss) income per ordinary share - Capri		$	(1.96	)		$	4.10			$	0.33			$	0.12			$	0.77			$	0.14			$	3.50

____________________
(1)		Asset impairment charges primarily relate to the impairment of the Jimmy Choo Retail and Wholesale reporting units goodwill and Versace and Jimmy Choo brand intangible assets, as well as the impairment of certain operating lease right-of-use assets.
(2)		Amounts impacting operating expenses primarily relate to Global Optimization Plan costs, equity awards associated with the acquisition of Gianni Versace S.r.l and severance expense.
(3)		Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(4)		The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure. During Fiscal 2024, the remaining transformation projects were paused due to the pending Merger and we will reassess this program, along with related timing, in Fiscal 2025.

SCHEDULE 8

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except share and per share data) (Unaudited)
		Three Months Ended April 1, 2023
		As Reported				Impairment of Assets				Restructuring and Other Charges (1)				COVID-19 Related Charges				ERP Implementation(2)				Capri Transformation(3)				War in Ukraine				As Adjusted
Gross profit		$	867			$	—			$	—			$	(3	)		$	—			$	—			$	(1	)		$	863
Operating expenses		$	907			$	(130	)		$	(5	)		$	—			$	(5	)		$	(24	)		$	(1	)		$	742
Total (loss) income from operations		$	(40	)		$	130			$	5			$	(3	)		$	5			$	24			$	—			$	121
Foreign currency loss (gain)		$	20			$	—			$	(14	)		$	—			$	—			$	—			$	—			$	6
(Loss) income before provision for income taxes		$	(70	)		$	130			$	19			$	(3	)		$	5			$	24			$	—			$	105
(Benefit) for income taxes		$	(37	)		$	12			$	5			$	(1	)		$	1			$	3			$	—			$	(17	)
Net (loss) income attributable to Capri		$	(34	)		$	118			$	14			$	(2	)		$	4			$	21			$	—			$	121
Weighted average diluted ordinary shares outstanding			123,327,209																												124,859,442
Diluted net (loss) income per ordinary share - Capri		$	(0.28	)		$	0.95			$	0.11			$	(0.02	)		$	0.04			$	0.17			$	—			$	0.97

____________________
(1)		Amounts impacting operating expenses primarily includes charges recorded in connection with the acquisition of Gianni Versace S.r.l. The foreign currency exchange loss represents a charge recognized in conjunction with restructuring activities to rationalize certain legal entities within our structure.
(2)		Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(3)		The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure.

SCHEDULE 9

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except share and per share data) (Unaudited)
		Fiscal Year Ended April 1, 2023
		As Reported			Impairment of Assets				Restructuring and Other Charges(1)				COVID-19 Related Charges				ERP Implementation(2)				Capri Transformation(3)				War in Ukraine				As Adjusted
Gross profit		$	3,724		$	—			$	—			$	(9	)		$	—			$	—			$	(1	)		$	3,714
Operating expenses		$	3,045		$	(142	)		$	(16	)		$	—			$	(25	)		$	(58	)		$	2			$	2,806
Total income from operations		$	679		$	142			$	16			$	(9	)		$	25			$	58			$	(3	)		$	908
Foreign currency loss (gain)		$	10		$	—			$	(14	)		$	—			$	—			$	—			$	—			$	(4	)
Income before provision for income taxes		$	648		$	142			$	30			$	(9	)		$	25			$	58			$	(3	)		$	891
Provision for income taxes		$	29		$	14			$	8			$	(2	)		$	6			$	13			$	(1	)		$	67
Net income attributable to Capri		$	616		$	128			$	22			$	(7	)		$	19			$	45			$	(2	)		$	821
Diluted net income per ordinary share - Capri		$	4.60		$	0.96			$	0.16			$	(0.05	)		$	0.13			$	0.34			$	(0.01	)		$	6.13

____________________
(1)		Amounts impacting operating expenses primarily includes charges recorded in connection with the acquisition of Gianni Versace S.r.l. The foreign currency exchange loss represents a charge recognized in conjunction with restructuring activities to rationalize certain legal entities within our structure.
(2)		Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.
(3)		The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240529961065/en/

Investor Relations:

Jennifer Davis

+1 (201) 514-8234

Jennifer.Davis@CapriHoldings.com

Media:

Press@CapriHoldings.com

Source: Capri Holdings Limited

FAQ

What were Capri Holdings' Q4 2024 revenue results?

Capri Holdings reported a Q4 2024 revenue decrease of 8.4% YoY to $1.223 billion.

How did Capri Holdings' Q4 2024 EPS perform?

Capri Holdings' adjusted EPS for Q4 2024 was $0.42.

What was Capri Holdings' Q4 2024 net loss?

Capri Holdings reported a Q4 2024 net loss of $472 million, or $(4.03) per share.

How did Capri Holdings' wholesale revenue perform in Q4 2024?

Capri Holdings' wholesale revenue decreased by high teens in Q4 2024.

What is the status of Capri Holdings' acquisition by Tapestry?

The FTC has filed a lawsuit to block the acquisition, which Capri Holdings plans to contest.

How many new consumers did Capri Holdings add in Q4 2024?

Capri Holdings added 11.6 million new consumers in Q4 2024, a 14% increase YoY.

What was Capri Holdings' Q4 2024 gross profit margin?

Capri Holdings' Q4 2024 gross profit margin was 62.7%, down from 64.9% last year.

What were the full-year cash flow results for Capri Holdings in 2024?

Capri Holdings reported a full-year cash flow from operations of $309 million in 2024.

How did Versace perform in Q4 2024?

Versace's Q4 2024 revenue decreased by 3.6%, with an operating margin decline to 0.4% from 5.1%.

What were Jimmy Choo's Q4 2024 financial results?

Jimmy Choo's Q4 2024 revenue decreased by 9.3%, with an operating margin decline to (5.8)% from (4.6)%.