By Dhirendra Tripathi
Investing.com – Capri Holdings stock (NYSE:CPRI) surged 9% Wednesday after the retailer raised its annual forecast, banking on consumer appetite for luxury shopping staying elevated.
The company, which owns marquee brands like Michael Kors, Versace, and Jimmy Choo now expects its annual revenue to be around $5.6 billion, revising it from its November guidance of $5.4 billion. Capri has revised its guidance at least twice. Profit per share is seen at $6.
Luxury retailers like LVMH (PA:LVMH) and H&M (ST:HMb) have seen a surge in sales last few months as consumers rush to buy jewelry, watches, bags and shoes, popularly known as ‘revenge shopping’ as they give vent to the frustration of being home for long stretches the last two years.
The company's total revenue rose 24% to $1.6 billion in the third quarter ended December 25, surpassing the pre-pandemic levels. The company said the revenue would have been higher but was constrained by lower on-hand inventory levels. A significant quantity of inventory remains in transit, the company said while closing the quarter with 24% more of it from a year ago.
According to Reuters, Capri is looking to reposition its brands, particularly Versace, at higher price points.
"We've seen absolutely no consumer resistance to any of the price increases that we have taken, and there will be more as well," the agency quoted CEO John Idol as telling analysts in a call.
Tight control on costs helped the company improve its operating margin 2.6 percentage points to 22.3%.
Michael Kors, the biggest brand in the stable, grew 20% to $1.2 billion. Versace grew 29% while Jimmy Choo jumped 47% on a smaller base.
Third-quarter adjusted profit per share was $2.22, rising more than 34% due to control on expenses.