By Uday Sampath Kumar
(Reuters) -Capri Holdings Ltd raised its profit forecast for the full year on Wednesday, as Versace dresses and Michael Kors handbags come back in vogue for higher-income consumers returning to their lavish shopping routines.
Shares of Capri, which also owns Jimmy Choo, rose 4.6% to $50.98 as the company announced a new $1 billion share buyback program.
Demand for high fashion among affluent consumers, who have resumed going to social events, has picked up in recent months despite decades-high inflation in the United States, allowing luxury goods makers to keep raising prices across products.
Two “very large” price increases at British fashion house Jimmy Choo saw no pushback from consumers, John Idol, chief executive officer of Capri, said in a post-earnings conference call.
“Dressing up and having a little more fun with your glamour is back,” Idol said, adding that further price increase across brands are planned for fall.
Ralph Lauren Corp and high-end retailer Nordstrom Inc had also flagged strong demand last month, even as Walmart and Target cut forecasts citing lower consumer spending power due to inflation.
Sales at Michael Kors, Capri’s biggest brand, rose 21.8% to $1.02 billion in the fourth quarter, while Jimmy Choo’s revenue rose 25.8% and revenue at Versace jumped 34%.
Capri forecast fiscal 2023 profit of about $6.85 per share, compared with its prior estimate of about $6.60 per share.
However, the company lowered its 2023 revenue forecast to $5.95 billion from about $6.1 billion, due to a stronger dollar and COVID-19 lockdowns in China.
The company’s quarterly total revenue rose 24.6% to $1.49 billion, beating analysts’ estimates of $1.41 billion, according to IBES data from Refinitiv.
On an adjusted basis, Capri earned $1.02 per share, above estimates of 82 cents per share.
(Reporting by Uday Sampath in Bengaluru; Editing by Amy Caren Daniel)
