Capri Holdings Q4 results fall short of estimates

Capri Holdings (CPRI), the parent company of brands such as Vesace and Michael Kors, posted fourth quarter results that missed Wall Street expectations. Adjusted earnings of $0.42 per share was below the estimate of $0.72. Revenue was also a miss, $1.22 billion versus the estimated $1.3 billion. Capri Holdings Chairman and CEO John Idol said in the release, "We were disappointed with our results as performance in the fourth quarter continued to be impacted by softening demand globally for fashion luxury goods."

Yahoo Finance's Julie Hyman and Josh Lipton explain the headwinds the luxury retail giant is facing.

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This post was written by Stephanie Mikulich.

Video transcript

We are getting earnings right now from Capri Holdings.

Of course, this is the parent company of a number of high end consumer brands for sati Jimmy Choo.

Uh, Michael Kors, Uh, the company, um, coming out with numbers that missed estimates here.

Earnings per share in particular coming out 30 cents below what analysts have been spending at 42 cents versus the 72 cent estimate of revenue.

A little bit light of estimates at $1.22 billion.

I'm looking at John Idol's comments here is the chairman and CEO and he basically said they're softening demand globally for fashion luxury goods, he said.

In particular, things did improve sequentially in America and in Europe.

Mideast in Africa, trends slowed in Asia, and he said sales remain challenged in the wholesale channel and worth pointing out heading into this report, The stock was already plenty beaten up.

It was down about 30% already.

This year actually hit a 52 week low this week.

And what interesting is you know, very few analysts.

Sometimes you'll see that and analyst kind of think OK and you'll see them start moving in.

They think the bad news is priced in.

But really, if you look at the street, three buys 13 holes.

So most folks who are paid to give you an opinion here are still sitting on the sidelines.

Right?

Well, there's a big black cloud that is, uh, hovering over this company.

Tapestry was supposed to buy them.

The FTC sued to block it.

Um, he makes clear in this statement, uh, John Idle, that is that they're continuing to fight to get the deal done.

But that's a huge, um, piece of uncertainty that is hovering over the company.

And and that doesn't seem to be that like it's gonna be resolved in the very short term, just very quickly here.

When you look at, uh, overall revenue is down 8.4%.

If you look at the various business lines.

Versace down 3.6%.

Jimmy Choo, down 9.3%.

Michael Kors, down 9.7%.

So, you know, there has been this conventional wisdom, and it's been borne out by some of the luxury goods makers that Amy just referred to the K shape, you know, economy where, uh, upper end consumers are doing pretty well.

We're starting to see some cracks in that, and this seems to be the latest example of that