Fourth Quarter Adjusted Earnings Per Share Exceeded Expectations
Annual Revenue and Adjusted Earnings Per Share Increased Double Digits
LONDON--(BUSINESS WIRE)--
Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today
announced its financial results for the fourth quarter of fiscal 2019
ended March 30, 2019.
This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20190529005285/en/
Fourth Quarter and Fiscal 2019 Highlights
-
Fourth quarter and full year revenue growth of 13.9% and 11.0%,
respectively
-
Fourth quarter adjusted earnings per share of $0.63, above expectations
-
Full year adjusted earnings per share of $4.97 increased 10.0% above
prior year, including $0.13 dilution from Versace
-
Reaffirm Fiscal 2020 adjusted earnings per share guidance of $4.95
John D. Idol, the Company’s Chairman and Chief Executive Officer, said,
“Fiscal 2019 was a transformational year for Capri Holdings. We expanded
our fashion luxury group with the addition of Versace, one of the
world’s most storied Italian luxury brands. Jimmy Choo delivered strong
results and we continued to execute against Michael Kors’ three
strategic growth pillars of product innovation, brand engagement and
customer experience. For the year, we were pleased that our luxury group
delivered both double digit revenue and adjusted earnings per share
growth.”
Mr. Idol continued, “Looking ahead, Fiscal 2020 will be an investment
year for our group, and we believe our initiatives will deliver strong
revenue growth for Capri Holdings. Longer term, our three brands
position Capri Holdings to accelerate revenue from $6 billion to $8
billion dollars, which will be led by Versace and Jimmy Choo, with
Michael Kors remaining a strong foundation for Capri Holdings. We expect
to grow Versace from $900 million to $2 billion dollars in revenue,
expand Jimmy Choo from nearly $600 million to $1 billion in revenue,
while building Michael Kors from $4.5 billion to $5.0 billion in
revenue. Taken together, we believe our three iconic, founder-led
fashion brands position Capri Holdings to deliver multiple years of
earnings growth."
Fourth Quarter Fiscal 2019 Results
Financial Results and non-GAAP Reconciliation
The Company’s results are reported in this press release in accordance
with accounting principles generally accepted in the United States
(“U.S. GAAP”) and on an adjusted, non-GAAP basis. A reconciliation of
GAAP to non-GAAP financial information is provided at the end of this
press release.
Segment Reporting
As a result of the acquisition of Versace, effective beginning in the
fourth quarter of Fiscal 2019, the Company realigned its reportable
segments according to the new structure of the business. As a result,
the Company now operates in three reportable segments representing the
Versace, Jimmy Choo and Michael Kors brands. In addition to these
reportable segments, the Company has certain corporate costs that are
not directly attributable to the brands, and therefore, are not
allocated to segments. These costs will be reported as Corporate
Unallocated Expenses. In addition, the Company will report Versace
results on a one month lag, with fourth quarter fiscal 2019 results
comprised of January and February, and full year fiscal 2020 results
comprised of March 2019 through February 2020.
Overview of Capri Holdings Fourth Quarter Fiscal 2019 Results:
-
Total revenue of $1.344 billion increased 13.9% compared to last year.
On a constant currency basis, total revenue increased 16.5%.
-
Gross profit was $793 million and gross margin was 59.0%, compared to
$710 million and 60.2% in the prior year. Adjusted gross profit was
$798 million and adjusted gross margin was 59.4%, compared to $712
million and 60.3% in the prior year.
-
Income from operations was $40 million and operating margin was 3.0%,
compared to $87 million and 7.4% in the prior year. Adjusted income
from operations was $125 million and operating margin was 9.3%,
compared to $154 million and 13.1% in the prior year.
-
Net income was $19 million, or $0.13 per diluted share compared to $44
million, or $0.29 per diluted share in the prior year. Adjusted net
income was $95 million, or $0.63 per diluted share, compared to $97
million or $0.63 per diluted share in the prior year.
-
Inventory at March 30, 2019 was $953 million, a 44.2% increase as
compared to the prior year.
Versace Fourth Quarter Fiscal 2019 Results:
-
Versace revenue was $137 million. The Company acquired Versace on
December 31, 2018, and compared to Versace stand-alone results from
the prior year, revenue increased high single digits.
-
Versace operating loss was $11 million and operating margin was
(8.0)%. Adjusted operating loss was $6 million and adjusted operating
margin was (4.4)%.
Jimmy Choo Fourth Quarter Fiscal 2019 Results:
-
Jimmy Choo revenue of $139 million increased 28.7% compared to the
prior year. On a constant currency basis, total revenue increased
35.1%. On a constant currency basis, comparable store sales increased
mid single digits.
-
Jimmy Choo operating loss was $8 million and operating margin was
(5.8)%, compared to an operating loss of $18 million and operating
margin of (16.7)% in the prior year. Adjusted operating loss was $16
million and adjusted operating margin was (14.8)% in the prior year.
Michael Kors Fourth Quarter Fiscal 2019 Results:
-
Michael Kors revenue of $1.068 billion decreased 0.4% compared to the
prior year. On a constant currency basis, total revenue increased
1.8%. On a constant currency basis, comparable store sales decreased
1.0%.
-
Michael Kors operating income was $166 million and operating margin
was 15.5%, compared to $195 million and 18.2% in the prior year.
Outlook
The following guidance is provided on an adjusted, non-GAAP basis. All
comparable store sales guidance is provided on a constant currency basis.
Full Year Fiscal 2020 Outlook
For Capri Holdings, the Company expects the following.
-
Total revenue of approximately $6.0 billion
-
Operating margin of approximately 15.5%
-
Interest expense in a range of $25 million to $35 million
-
Weighted average diluted shares outstanding of approximately 155
million
-
Effective tax rate of approximately 15%
-
Diluted earnings per share of $4.95, including approximately $0.25 per
share of dilution from Versace
For Versace, the Company plans to execute against its plan to rapidly
expand Versace’s luxury business, including increasing strategic
investments to enhance brand engagement, expanding Versace's retail
fleet globally, and launching omni-channel capabilities. The Company
expects the following.
-
Revenue of approximately $900 million
-
Comparable store sales growth in the mid single digits
-
Operating margin of positive low single digits
For Jimmy Choo, the Company plans to continue to innovate and grow in
women’s footwear, capitalize on the significant opportunity to grow
Jimmy Choo's accessories business and further expand Jimmy Choo's retail
fleet. The Company expects the following.
-
Revenue of approximately $650 million
-
Comparable store sales growth in the mid single digits
-
Operating margin slightly improved over prior year
For Michael Kors, the Company plans to maintain its focus on product
innovation as well as expanding its successful signature offerings. The
Company plans to continue to increase brand engagement by leveraging
Michael's leading social media presence and enhancing its 360 degree
marketing efforts. Finally, the Company plans to enhance customer
experience by expanding its Kors VIP program and continuing its store
remodeling program. The Company expects the following.
-
Revenue of approximately $4.45 billion, a slight reduction from prior
guidance reflecting anticipated unfavorable foreign currency impact
and lower wholesale revenue
-
Comparable store sales to be approximately flat
-
Operating margin approximately stable compared to prior year
First Quarter Fiscal 2020 Outlook
For Capri Holdings, the Company expects the following.
-
Total revenue of approximately $1.36 billion
-
Operating margin of approximately 13.0%
-
Interest expense in a range of $8 million to $12 million
-
Weighted average diluted shares outstanding of approximately 155
million
-
Effective tax rate of approximately 18%
-
Diluted earnings per share of $0.85 to $0.90, including approximately
$0.15 per share of dilution from Versace
For Versace, the Company expects the following.
-
Revenue of approximately $200 million
-
Comparable store sales growth in the mid single digits
-
Negative operating margin reflecting normal seasonality and increased
investments
For Jimmy Choo, the Company expects the following.
-
Revenue to be approximately flat to prior year, reflecting unfavorable
foreign exchange impact and a shift in wholesale shipment timing that
benefited the fourth quarter
-
Comparable store sales growth in the low single digits
-
Operating margin below prior year due to revenue timing and higher
investments
For Michael Kors, the Company expects the following.
-
Revenue moderately below prior year
-
Comparable store sales in the negative low single digits
-
Operating margin to be below prior year
Overall, the Company expects first quarter earnings per share to be
below the prior year reflecting the following factors.
-
A higher tax rate as the Company laps benefits related to employee
equity compensation of approximately $0.10 per share
-
Dilution from Versace of approximately $0.15 per share
-
For Jimmy Choo, an unfavorable foreign exchange impact and a shift in
wholesale revenue timing that benefited the fourth quarter, as well as
higher investments in the first quarter, for a combined impact of
approximately $0.06 per share
-
Lower Michael Kors operating income primarily driven by reduced
wholesale and licensing revenue
Beyond Fiscal 2020, the Company has provided an updated table added to
this earnings release outlining the major components of its anticipated
growth. For Capri Holdings, the Company expects to deliver accelerated
revenue and earnings per share growth driven by revenue growth for
Versace, Jimmy Choo and Michael Kors, as well as expanded margins from
Versace and Jimmy Choo. The Company looks forward to providing more
insights into its brand plans supporting these expectations at its
Investor Day on June 4th.
Conference Call Information
A conference call to discuss fourth quarter results is scheduled for
today, May 29, 2019 at 8:30 a.m. ET. A live webcast of the conference
call will be available on the Company’s website, www.capriholdings.com.
In addition, a replay will be available shortly after the conclusion of
the call and remain available until June 5, 2019. To access the
telephone replay, listeners should dial 1-844-512-2921 or 1-412-317-6671
for international callers. The access code for the replay is 1071005. A
replay of the webcast will also be available within two hours of the
conclusion of the call and will remain on the website for 90 days.
Use of Non-GAAP Financial Measures
Constant currency effects are non-GAAP financial measures, which are
provided to supplement our reported operating results to facilitate
comparisons of our operating results and trends in our business,
excluding the effects of foreign currency rate fluctuations. Because we
are a global company, foreign currency exchange rates may have a
significant effect on our reported results. We calculate constant
currency measures and the related foreign currency impacts by
translating the current year’s reported amounts into comparable amounts
using prior year’s foreign exchange rates for each currency. All
constant currency performance measures discussed below should be
considered a supplement to and not in lieu of our operating performance
measures calculated in accordance with U.S. GAAP. Additionally, this
earnings release includes certain non-GAAP financial measures relating
to certain one-time costs associated with the Jimmy Choo acquisition and
the Versace acquisition and restructuring and non-cash impairment
charges primarily associated with underperforming retail stores. The
Company uses non-GAAP financial measures, among other things, to
evaluate its operating performance and in order to represent the manner
in which the Company conducts and views its business. The Company
believes that excluding non-recurring items helps its management and
investors compare operating performance based on its ongoing operations.
While the Company considers the non-GAAP measures to be useful
supplemental measures in analyzing its results, they are not intended to
replace, nor act as a substitute for, any amounts presented in its
consolidated financial statements prepared in conformity with U.S. GAAP
and may be different from non-GAAP measures reported by other companies.
About Capri Holdings Limited
Capri Holdings Limited is a global fashion luxury group, consisting of
iconic brands that are industry leaders in design, style and
craftsmanship. Its brands cover the full spectrum of fashion luxury
categories including women’s and men’s accessories, footwear and
ready-to-wear as well as wearable technology, watches, jewelry, eyewear
and a full line of fragrance products. The Company’s goal is to continue
to extend the global reach of its brands while ensuring that they
maintain their independence and exclusive DNA. Capri Holdings Limited is
publicly listed on the New York Stock Exchange under the ticker CPRI.
Forward Looking Statements
This press release contains statements which are, or may be deemed to
be, “forward-looking statements.” Forward-looking statements are
prospective in nature and are not based on historical facts, but rather
on current expectations and projections of the management of Capri
Holdings Limited (the “Company”) about future events, and are therefore
subject to risks and uncertainties which could cause actual results to
differ materially from the future results expressed or implied by the
forward-looking statements. All statements other than statements of
historical facts included in this press release may be forward-looking
statements. Without limitation, any statements preceded or followed by
or that include the words “targets”, “plans”, “believes”, “expects”,
“aims”, “intends”, “will”, “should”, “could”, “would”, “may”,
“anticipates”, “estimates”, “synergy”, “cost-saving”, “projects”,
“goal”, “strategy”, “budget”, “forecast” or “might” or, words or terms
of similar substance or the negative thereof, are forward-looking
statements. Forward-looking statements include statements relating to
future capital expenditures, expenses, revenues, earnings, economic
performance, indebtedness, financial condition, share buybacks, dividend
policy, losses and future prospects of the Company, business and
management strategies and the expansion and growth of the Company’s
operations, and benefits from any acquisition. These forward-looking
statements are not guarantees of future financial performance. Such
forward-looking statements involve known and unknown risks and
uncertainties that could significantly affect expected results and are
based on certain key assumptions, which could cause actual results to
differ materially from those projected or implied in any forward-looking
statements. These risks, uncertainties and other factors include the
Company’s ability to integrate successfully and to achieve anticipated
benefits of any acquisition; the risk of disruptions to the Company’s
businesses; the negative effects of events on the market price of the
Company’s ordinary shares and its operating results; significant
transaction costs; unknown liabilities; the risk of litigation and/or
regulatory actions related to the Company’s businesses; fluctuations in
demand for the Company’s products; levels of indebtedness (including the
indebtedness incurred in connection with acquisitions); future
availability of credit; the timing and scope of future share buybacks,
which may be made in open market or privately negotiated transactions,
and are subject to market conditions, applicable legal requirements,
trading restrictions under the Company’s insider trading policy and
other relevant factors, and which share repurchases may be suspended or
discontinued at any time,
the level of other investing activities
and uses of cash; changes in consumer traffic and retail trends; loss of
market share and industry competition; fluctuations in the capital
markets; fluctuations in interest and exchange rates; the occurrence of
unforeseen disasters or catastrophes; political or economic instability
in principal markets; adverse outcomes in litigation; and general, local
and global economic, political, business and market conditions, as well
as those risks set forth in the reports that the Company files from time
to time with the U.S. Securities and Exchange Commission, including the
Company’s Annual Report on Form 10-K for the fiscal year ended March 31,
2018 (File No. 001-35368). The Company disclaims any obligation to
update or revise any forward-looking or other statements contained
herein other than in accordance with legal and regulatory obligations.
|
SCHEDULE 1
|
|
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions,
except share and per share data)
(Unaudited)
|
|
|
|
|
Three Months Ended
|
|
Fiscal Years Ended
|
|
|
|
March 30, 2019
|
|
March 31, 2018
|
|
March 30, 2019
|
|
March 31, 2018
|
Total revenue
|
|
|
$
|
1,344
|
|
|
$
|
1,180
|
|
|
$
|
5,238
|
|
|
$
|
4,719
|
|
Cost of goods sold
|
|
|
551
|
|
|
470
|
|
|
2,058
|
|
|
1,860
|
|
Gross profit
|
|
|
793
|
|
|
710
|
|
|
3,180
|
|
|
2,859
|
|
Total operating expenses
|
|
|
753
|
|
|
623
|
|
|
2,445
|
|
|
2,110
|
|
Income from operations
|
|
|
40
|
|
|
87
|
|
|
735
|
|
|
749
|
|
Other income, net
|
|
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|
(2
|
)
|
Interest expense, net
|
|
|
17
|
|
|
12
|
|
|
38
|
|
|
22
|
|
Foreign currency loss (gain)
|
|
|
1
|
|
|
2
|
|
|
80
|
|
|
(13
|
)
|
Income before provision for income taxes
|
|
|
22
|
|
|
74
|
|
|
621
|
|
|
742
|
|
Provision for income taxes
|
|
|
3
|
|
|
30
|
|
|
79
|
|
|
150
|
|
Net income
|
|
|
19
|
|
|
44
|
|
|
542
|
|
|
592
|
|
Less: Net gain attributable to noncontrolling interests
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
Net income attributable to Capri
|
|
|
$
|
19
|
|
|
$
|
44
|
|
|
$
|
543
|
|
|
$
|
592
|
|
Weighted average ordinary shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
150,801,608
|
|
|
150,818,144
|
|
|
149,765,468
|
|
|
152,283,586
|
|
Diluted
|
|
|
152,083,632
|
|
|
154,252,751
|
|
|
151,614,350
|
|
|
155,102,885
|
|
Net income per ordinary share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.13
|
|
|
$
|
0.29
|
|
|
$
|
3.62
|
|
|
$
|
3.89
|
|
Diluted
|
|
|
$
|
0.13
|
|
|
$
|
0.29
|
|
|
$
|
3.58
|
|
|
$
|
3.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 2
|
|
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In millions, except share data)
(Unaudited)
|
|
|
|
March 30, 2019
|
|
March 31, 2018
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
172
|
|
|
$
|
163
|
|
Receivables, net
|
|
383
|
|
|
290
|
|
Inventories
|
|
953
|
|
|
661
|
|
Prepaid expenses and other current assets
|
|
221
|
|
|
148
|
|
Total current assets
|
|
1,729
|
|
|
1,262
|
|
Property and equipment, net
|
|
615
|
|
|
583
|
|
Intangible assets, net
|
|
2,293
|
|
|
1,236
|
|
Goodwill
|
|
1,659
|
|
|
848
|
|
Deferred tax assets
|
|
112
|
|
|
56
|
|
Other assets
|
|
242
|
|
|
74
|
|
Total assets
|
|
$
|
6,650
|
|
|
$
|
4,059
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
371
|
|
|
$
|
294
|
|
Accrued payroll and payroll related expenses
|
|
133
|
|
|
93
|
|
Accrued income taxes
|
|
34
|
|
|
78
|
|
Short-term debt
|
|
630
|
|
|
200
|
|
Accrued expenses and other current liabilities
|
|
374
|
|
|
295
|
|
Total current liabilities
|
|
1,542
|
|
|
960
|
|
Deferred rent
|
|
132
|
|
|
128
|
|
Deferred tax liabilities
|
|
438
|
|
|
186
|
|
Long-term debt
|
|
1,936
|
|
|
675
|
|
Other long-term liabilities
|
|
166
|
|
|
88
|
|
Total liabilities
|
|
4,214
|
|
|
2,037
|
|
Commitments and contingencies
|
|
|
|
|
Redeemable noncontrolling interest
|
|
4
|
|
|
—
|
|
Shareholders’ equity
|
|
|
|
|
Ordinary shares, no par value; 650,000,000 shares authorized;
216,050,939 shares issued and 150,932,306 outstanding at
March 30, 2019; 210,991,091 shares issued and 149,698,407
outstanding at March 31, 2018
|
|
—
|
|
|
—
|
|
Treasury shares, at cost (65,118,633 shares at March 30, 2019 and
61,292,684 shares at March 31, 2018)
|
|
(3,223
|
)
|
|
(3,016
|
)
|
Additional paid-in capital
|
|
1,011
|
|
|
831
|
|
Accumulated other comprehensive (loss) income
|
|
(66
|
)
|
|
51
|
|
Retained earnings
|
|
4,707
|
|
|
4,152
|
|
Total shareholders’ equity of Capri
|
|
2,429
|
|
|
2,018
|
|
Noncontrolling interest
|
|
3
|
|
|
4
|
|
Total shareholders’ equity
|
|
2,432
|
|
|
2,022
|
|
Total liabilities and shareholders’ equity
|
|
$
|
6,650
|
|
|
$
|
4,059
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 3
|
|
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED
SEGMENT DATA
($ in millions)
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Fiscal Years Ended
|
|
|
March 30, 2019
|
|
March 31, 2018
|
|
March 30, 2019
|
|
March 31, 2018
|
Revenue by Segment and Region:
|
|
|
|
|
|
|
|
|
Versace
|
|
The Americas
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
|
EMEA
|
|
66
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
|
Asia
|
|
49
|
|
|
—
|
|
|
49
|
|
|
—
|
|
Versace Revenue
|
|
137
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Jimmy Choo
|
|
The Americas
|
|
21
|
|
|
16
|
|
|
96
|
|
|
37
|
|
|
|
EMEA
|
|
73
|
|
|
58
|
|
|
321
|
|
|
123
|
|
|
|
Asia
|
|
45
|
|
|
34
|
|
|
173
|
|
|
63
|
|
Jimmy Choo Revenue
|
|
139
|
|
|
108
|
|
|
590
|
|
|
223
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Kors
|
|
The Americas
|
|
702
|
|
|
685
|
|
|
3,064
|
|
|
2,996
|
|
|
|
EMEA
|
|
215
|
|
|
230
|
|
|
892
|
|
|
970
|
|
|
|
Asia
|
|
151
|
|
|
157
|
|
|
555
|
|
|
530
|
|
Michael Kors Revenue
|
|
1,068
|
|
|
1,072
|
|
|
4,511
|
|
|
4,496
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
$
|
1,344
|
|
|
$
|
1,180
|
|
|
$
|
5,238
|
|
|
$
|
4,719
|
|
|
|
|
|
|
|
|
|
|
Income from Operations:
|
|
|
|
|
|
|
|
|
Versace
|
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
Jimmy Choo
|
|
|
|
(8
|
)
|
|
(18
|
)
|
|
20
|
|
|
(4
|
)
|
Michael Kors
|
|
|
|
166
|
|
|
195
|
|
|
964
|
|
|
975
|
|
Total segment income from operations
|
|
147
|
|
|
177
|
|
|
973
|
|
|
971
|
|
Less: Corporate expenses
|
|
(28
|
)
|
|
(25
|
)
|
|
(93
|
)
|
|
(87
|
)
|
Restructuring and other charges
|
|
(75
|
)
|
|
(51
|
)
|
|
(124
|
)
|
|
(102
|
)
|
Impairment of long-lived assets
|
|
(4
|
)
|
|
(14
|
)
|
|
(21
|
)
|
|
(33
|
)
|
Total Income from Operations
|
|
$
|
40
|
|
|
$
|
87
|
|
|
$
|
735
|
|
|
$
|
749
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin:
|
|
|
|
|
|
|
|
|
|
|
Versace
|
|
|
|
(8.0
|
)%
|
|
—
|
%
|
|
(8.0
|
)%
|
|
—
|
%
|
Jimmy Choo
|
|
|
|
(5.8
|
)%
|
|
(16.7
|
)%
|
|
3.4
|
%
|
|
(1.8
|
)%
|
Michael Kors
|
|
|
|
15.5
|
%
|
|
18.2
|
%
|
|
21.4
|
%
|
|
21.7
|
%
|
Total Operating Margin
|
|
|
|
3.0
|
%
|
|
7.4
|
%
|
|
14.0
|
%
|
|
15.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 4
|
|
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
SUPPLEMENTAL
RETAIL STORE INFORMATION
(Unaudited)
|
|
|
|
|
|
As of
|
Retail Store Information:
|
|
|
|
March 30, 2019
|
|
March 31, 2018
|
Versace
|
|
|
|
188
|
|
|
—
|
Jimmy Choo
|
|
|
|
208
|
|
|
182
|
Michael Kors
|
|
|
|
853
|
|
|
829
|
Total number of retail stores
|
|
|
|
1,249
|
|
|
1,011
|
|
|
|
|
|
|
|
|
|
SCHEDULE 5
|
|
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSTANT
CURRENCY DATA
(In millions)
(Unaudited)
|
|
|
|
|
Three Months Ended
|
|
% Change
|
|
|
|
March 30, 2019
|
|
March 31, 2018
|
|
As Reported
|
|
Constant Currency
|
Total revenue:
|
|
|
|
|
|
|
|
|
|
Versace
|
|
|
$
|
137
|
|
$
|
—
|
|
NM
|
|
|
NM
|
|
Jimmy Choo
|
|
|
|
139
|
|
|
108
|
|
28.7
|
%
|
|
35.1
|
%
|
Michael Kors
|
|
|
|
1,068
|
|
|
1,072
|
|
(0.4
|
)%
|
|
1.8
|
%
|
Total revenue
|
|
|
$
|
1,344
|
|
$
|
1,180
|
|
13.9
|
%
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Years Ended
|
|
% Change
|
|
|
|
March 30, 2019
|
|
March 31, 2018
|
|
As Reported
|
|
Constant Currency
|
Total revenue:
|
|
|
|
|
|
|
|
|
|
Versace
|
|
|
$
|
137
|
|
$
|
—
|
|
NM
|
|
|
NM
|
|
Jimmy Choo
|
|
|
|
590
|
|
|
223
|
|
NM
|
|
|
NM
|
|
Michael Kors
|
|
|
|
4,511
|
|
|
4,496
|
|
0.3
|
%
|
|
0.8
|
%
|
Total revenue
|
|
|
$
|
5,238
|
|
$
|
4,719
|
|
11.0
|
%
|
|
11.7
|
%
|
|
___________________
NM Not meaningful
|
|
SCHEDULE 6
|
|
|
NON-GAAP RECONCILIATIONS OF REPORTED TO ADJUSTED MEASURES,
EXCLUDING
LONG-LIVED ASSET IMPAIRMENTS, RESTRUCTURING AND OTHER CHARGES,
INVENTORY
STEP-UP RELATED TO VERSACE ACQUISITION AND
ERP
IMPLEMENTATION COSTS
(In millions, except share and
per share data)
(Unaudited)
|
|
|
|
Three Months Ended March 30, 2019
|
|
|
As Reported
|
|
Impairment Charges
|
|
Restructuring and Other Charges(1)
|
|
Inventory Step-up Adjustment
|
|
ERP Implementation
|
|
As Adjusted
|
Gross profit
|
|
$
|
793
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Versace operating expense
|
|
$
|
98
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95
|
|
Operating expenses
|
|
$
|
753
|
|
|
$
|
(4
|
)
|
|
$
|
(75
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Versace operating loss
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
Total income from operations
|
|
$
|
40
|
|
|
$
|
4
|
|
|
$
|
75
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
75
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
107
|
|
Provision for income taxes
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Net income attributable to Capri
|
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
68
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
95
|
|
Diluted net income per ordinary share - Capri
|
|
$
|
0.13
|
|
|
$
|
0.02
|
|
|
$
|
0.44
|
|
|
$
|
0.03
|
|
|
$
|
0.01
|
|
|
$
|
0.63
|
|
______________________
|
(1)
|
|
Includes store closure costs recorded in connection with the Michael
Kors Retail Fleet Optimization Plan and other restructuring
initiatives, and transaction and transition costs recorded in
connection with the acquisitions of Gianni Versace S.r.l and Jimmy
Choo Group Limited.
|
|
|
|
|
SCHEDULE 7
|
|
NON-GAAP RECONCILIATIONS OF REPORTED TO ADJUSTED MEASURES,
EXCLUDING
LONG-LIVED ASSET IMPAIRMENTS, RESTRUCTURING AND OTHER CHARGES,
INVENTORY
STEP-UP RELATED TO VERSACE AND JIMMY CHOO ACQUISITIONS,
FOREIGN
CURRENCY EFFECTS RELATED TO VERSACE ACQUISITION AND
ERP
IMPLEMENTATION COSTS
(In millions, except share and
per share data)
(Unaudited)
|
|
|
|
Fiscal Year Ended March 30, 2019
|
|
|
As Reported
|
|
Impairment Charges
|
|
Restructuring and Other Charges(1)
|
|
Inventory Step-up Adjustment
|
|
Acquisition Foreign Currency Effects
|
|
ERP Implementation
|
|
As Adjusted
|
Gross profit
|
|
$
|
3,180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
$
|
2,445
|
|
|
$
|
(21
|
)
|
|
$
|
(124
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
2,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Versace operating loss
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
Jimmy Choo operating income
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26
|
|
Total income from operations
|
|
$
|
735
|
|
|
$
|
21
|
|
|
$
|
124
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency loss
|
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(72
|
)
|
|
$
|
—
|
|
|
$
|
8
|
|
Income before provision for income taxes
|
|
$
|
621
|
|
|
$
|
21
|
|
|
$
|
124
|
|
|
$
|
11
|
|
|
$
|
72
|
|
|
$
|
1
|
|
|
$
|
850
|
|
Provision for income taxes
|
|
$
|
79
|
|
|
$
|
4
|
|
|
$
|
14
|
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
98
|
|
Net income attributable to Capri
|
|
$
|
543
|
|
|
$
|
17
|
|
|
$
|
110
|
|
|
$
|
9
|
|
|
$
|
73
|
|
|
$
|
1
|
|
|
$
|
753
|
|
Diluted net income per ordinary share - Capri
|
|
$
|
3.58
|
|
|
$
|
0.11
|
|
|
$
|
0.73
|
|
|
$
|
0.06
|
|
|
$
|
0.48
|
|
|
$
|
0.01
|
|
|
$
|
4.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________
|
(1)
|
|
Includes store closure costs recorded in connection with the Michael
Kors Retail Fleet Optimization Plan and other restructuring
initiatives, and transaction and transition costs recorded in
connection with the acquisitions of Gianni Versace S.r.l and Jimmy
Choo Group Limited.
|
|
|
|
|
SCHEDULE 8
|
|
NON-GAAP RECONCILIATIONS OF REPORTED TO ADJUSTED MEASURES,
EXCLUDING
LONG-LIVED ASSET IMPAIRMENTS,
RESTRUCTURING AND OTHER
CHARGES, AND
INVENTORY STEP-UP RELATED TO JIMMY CHOO
ACQUISITION
(In millions, except share and per share
data)
(Unaudited)
|
|
|
|
Three Months Ended March 31, 2018
|
|
|
As Reported
|
|
Impairment Charges
|
|
Restructuring and Other Charges(1)
|
|
Inventory Step-up Adjustment
|
|
As Adjusted
|
Gross profit
|
|
$
|
710
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
712
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
$
|
623
|
|
|
$
|
(14
|
)
|
|
$
|
(51
|
)
|
|
$
|
—
|
|
|
$
|
558
|
|
|
|
|
|
|
|
|
|
|
|
|
Jimmy Choo operating loss
|
|
$
|
(18
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
(16
|
)
|
Total income from operations
|
|
$
|
87
|
|
|
$
|
14
|
|
|
$
|
51
|
|
|
$
|
2
|
|
|
$
|
154
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
$
|
74
|
|
|
$
|
14
|
|
|
$
|
51
|
|
|
$
|
2
|
|
|
$
|
141
|
|
Provision for income taxes
|
|
$
|
30
|
|
|
$
|
3
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
44
|
|
Net income attributable to Capri
|
|
$
|
44
|
|
|
$
|
11
|
|
|
$
|
40
|
|
|
$
|
2
|
|
|
$
|
97
|
|
Diluted net income per ordinary share - Capri
|
|
$
|
0.29
|
|
|
$
|
0.07
|
|
|
$
|
0.26
|
|
|
$
|
0.01
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________
|
(1)
|
|
Includes store closure costs recorded in connection with the Michael
Kors Retail Fleet Optimization Plan, as well as transaction and
transition costs recorded in connection with the acquisition of
Jimmy Choo Group Limited.
|
|
|
|
|
SCHEDULE 9
|
|
NON-GAAP RECONCILIATIONS OF REPORTED TO ADJUSTED MEASURES,
EXCLUDING
LONG-LIVED ASSET IMPAIRMENTS,
RESTRUCTURING AND OTHER
CHARGES,
INVENTORY STEP-UP RELATED TO JIMMY CHOO
ACQUISITION, AND
DERIVATIVE CONTRACT RELATED TO
ACQUISITION OF JIMMY CHOO
(In millions, except share
and per share data)
(Unaudited)
|
|
|
|
Fiscal Year Ended March 31, 2018
|
|
|
As Reported
|
|
Impairment Charges
|
|
Restructuring and Other Charges(1)
|
|
Inventory Step-up Adjustment
|
|
Acquisition Price Derivative Contract
|
|
As Adjusted
|
Gross profit
|
|
$
|
2,859
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
2,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
$
|
2,110
|
|
|
$
|
(33
|
)
|
|
$
|
(102
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jimmy Choo operating income
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total income from operations
|
|
$
|
749
|
|
|
$
|
33
|
|
|
$
|
102
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency gain
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
(8
|
)
|
Income before provision for income taxes
|
|
$
|
742
|
|
|
$
|
33
|
|
|
$
|
102
|
|
|
$
|
4
|
|
|
$
|
(5
|
)
|
|
$
|
876
|
|
Provision for income taxes
|
|
$
|
150
|
|
|
$
|
7
|
|
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
175
|
|
Net income attributable to Capri
|
|
$
|
592
|
|
|
$
|
26
|
|
|
$
|
84
|
|
|
$
|
3
|
|
|
$
|
(4
|
)
|
|
$
|
701
|
|
Diluted net income per ordinary share - Capri
|
|
$
|
3.82
|
|
|
$
|
0.17
|
|
|
$
|
0.54
|
|
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
|
$
|
4.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________
|
(1)
|
|
Includes store closure costs recorded in connection with the Michael
Kors Retail Fleet Optimization Plan, as well as transaction and
transition costs recorded in connection with the acquisition of
Jimmy Choo Group Limited.
|
|
|
|
|
SCHEDULE 10
|
|
CAPRI FINANCIAL OUTLOOK
|
|
|
|
|
|
|
|
|
|
FY 2020
|
|
FY 2021
|
|
FY 2022
|
REVENUE
|
|
APPROXIMATELY $6.0B
|
|
MID SINGLE DIGIT GROWTH
|
|
MID SINGLE DIGIT GROWTH
|
MK REVENUE
|
|
APPROXIMATELY $4.45B
|
|
LOW SINGLE DIGIT GROWTH
|
|
LOW SINGLE DIGIT GROWTH
|
JC REVENUE
|
|
APPROXIMATELY $650M
|
|
DOUBLE DIGIT GROWTH
|
|
DOUBLE DIGIT GROWTH
|
VERSACE REVENUE
|
|
APPROXIMATELY $900M
|
|
DOUBLE DIGIT GROWTH
|
|
DOUBLE DIGIT GROWTH
|
ADJUSTED OPERATING MARGIN*
|
|
APPROXIMATELY 15.5%
|
|
APPROXIMATELY 16%
|
|
APPROXIMATELY 17%
|
MK OPERATING MARGIN*
|
|
STABLE
|
|
STABLE
|
|
STABLE
|
JC OPERATING MARGIN*
|
|
IMPROVING
|
|
HIGH SINGLE DIGITS
|
|
MID TEENS
|
VERSACE OPERATING MARGIN*
|
|
LOW SINGLE DIGITS
|
|
MID SINGLE DIGITS
|
|
LOW DOUBLE DIGITS
|
ADJUSTED NET INCOME*
|
|
FLAT
|
|
DOUBLE DIGIT GROWTH
|
|
DOUBLE DIGIT GROWTH
|
ADJUSTED EPS*
|
|
APPROXIMATELY $4.95
|
|
DOUBLE DIGIT GROWTH
|
|
DOUBLE DIGIT GROWTH
|
|
|
|
|
|
|
|
*US GAAP RESULTS ADJUSTED FOR SPECIAL ITEMS
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190529005285/en/
Investor Relations:
Jean Fontana
(646) 277-1214
jean.fontana@icrinc.com
or
Jennifer
Davis
(646) 677-1813
jennifer.davis@icrinc.com
Media:
Dinesh
Kandiah
(917) 934-2427
Press@CapriHoldings.com
Source: Capri Holdings Limited