:max_bytes(150000):strip_icc()/GettyImages-1347405528-0bbe19eeca32473299b955462bc53bd0.jpg "Capri Stock Sinks After Versace Parent’s Poor Earnings")
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Key Takeaways
- Versace’s parent company, Capri Holdings, reported fiscal-second-quarter results that missed analysts’ expectations.
- CEO John Idol pinned declining revenue on “softening demand globally for fashion luxury goods.”
- The company’s stock has lost about half its value since the FTC blocked a planned merger with rival Tapestry last month.
Capri Holdings (CPRI) saw its shares tumble Friday after reporting fiscal second-quarter results after yesterday’s closing bell that fell short of Wall Street’s expectations.
The owner of fashion brands Versace, Jimmy Choo, and Michael Kors saw revenue decline 16% year-over-year to $1.08 billion, below the analyst consensus from Visible Alpha. Net income was $24 million, or 20 cents per share, down from $90 million or 77 cents per share a year ago, well short of expectations.
John Idol, Capri’s chief executive officer (CEO), attributed the decline to “softening demand globally for fashion luxury goods.”
Michael Kors revenue declined 16% to $738 million, while Versace sales dropped 28% to $201 million. Jimmy Choo saw revenue increase 6% to $140 million.
Capri’s Merger Deal Blocked
The disappointing results come after a federal judge blocked Coach owner Tapestry’s (TPR) $8.5 billion deal to acquire Capri last month. Tapestry also owns the Kate Spade and Stuart Weitzman brands.
The luxury brands announced the deal last year but the Federal Trade Commission sued to block the merger, saying the combined firm would have too much power and reduce competition in the market for accessible luxury handbags.
Shares of Capri fell about 9% Friday and have lost more than half their value since the Tapestry deal was blocked.