Capri Holdings Ltd. is not immune to the impact of the deadly coronavirus outbreak.
The London-based company — parent to Michael Kors, Versace and Jimmy Choo — downwardly revised its revenue forecast for the year to $5.65 billion and projected lower earnings per share in the range of $4.45 to $4.50. Its previous guidance put sales at $5.8 billion, with downward adjustment shaving more than $100 million off that estimate, and adjusted EPS at $4.95. Management attributed the change to the health emergency related to the coronavirus, which has already killed nearly 500 and sickened more than 24,000.
“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,” said Chairman and CEO John Idol. “The situation in China and the measures being taken to protect the population are having a material impact on our business.”
Industry leaders have been keeping a close eye on China in the wake of the outbreak, which has been designated a public health emergency of international concern. Despite those fears, Capri expressed confidence in its businesses, delivering revenues and earnings per share above consensus bets. Adjusted EPS for the third quarter came in at $1.66, compared with predictions of $1.59, while sales improved 9.2% to $1.57 billion, versus analysts’ forecasts of $1.54 billion.
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As of 9:00 a.m. ET, Capri’s stock was up close to 5% at $32.23. While Michael Kors logged a 5.1% revenue decrease to $1.21 billion, Jimmy Choo’s sales rose 1.9% to $165 million and Versace’s sales totaled $195 million.
“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,” Idol added. “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.”
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