Michael Kors owner warns of £77m hit from coronavirus

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Michael Kors Capri Holdings John D. Idol
For the third quarter ending December 28, total revenue grew 9.2% year-on-year to £1.2 billion
// Capri Holdings reports total sales rise but warns of coronavirus impact on revenue
// The fashion group, which owns Versace and Jimmy Choo, beat analysts’ expectations
// The company now expects total revenue of £1 billion for the fourth quarter

Michael Kors parent company Capri Holdings has posted third quarter sales growth, but warned the coronavirus outbreak could result in a $100 million (£77 million) hit to revenue.

The fashion group, which also owns Versace and Jimmy Choo, beat analysts’ expectations but has so far closed 150 of its 220 stores in China after the coronavirus outbreak.

For the third quarter ending December 28, total revenue grew 9.2 per cent year-on-year to $1.57 billion (£1.2 billion), while net income was $210 million (£161 million) compared to $200 million (£153 million) in the prior year.


READ MORE: Capri slashes forecast again after sluggish Michael Kors & Jimmy Choo sales


Meanwhile, revenue at Michael Kors decreased 5.1 per cent in the period to $1.2 billion (£923 million), and Versace reported revenue of $195 million (£150 million).

At Jimmy Choo, revenue increased 1.9 per cent to $165 million (£126 million).

“For the third quarter, we were pleased to deliver revenue and earnings per share above our expectations,” Capri Holdings chief executive John D Idol said.

“Our revenue increase reflected the addition of Versace and growth from Jimmy Choo, while Michael Kors revenue was better than anticipated.

“The strategic initiatives for our recent acquisitions, Versace and Jimmy Choo, continue to gain traction, and we believe we are on the right path to position Michael Kors for future growth.

“Longer-term, as we continue to execute against our strategies, we are confident in our ability to deliver multiple years of revenue and earnings growth.

“We are in the midst of a dynamic global health emergency related to the coronavirus. Our thoughts and prayers go out to the people of China, including our own employees located in this region, as well as all of those affected by the virus globally.

“We hope for a speedy and positive resolution to this crisis. The situation in China and the measures being taken to protect the population are having a material impact on our business.”

The company now expects total revenue of $1.3 billion (£1 billion) for the fourth quarter and $5.65 billion (£4.34 billion) for the full fiscal year.

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