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Capri Holdings Limited Announces Third Quarter Fiscal 2021 Results

February 3, 2021

Q3 2021 Earnings Presentation

Revenue and Earnings Exceed Expectations

LONDON--(BUSINESS WIRE)-- Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results for the third quarter of fiscal 2021 ended December 26, 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210203005260/en/

Third Quarter Fiscal 2021 Highlights

  • Revenue decline of 17%, a sequential improvement relative to the second quarter
    • E-commerce sales improved sequentially, increasing 65%
    • Positive retail sales in Asia across all luxury houses, led by double digit growth in Mainland China
    • Double-digit global retail sales growth at Versace
  • Adjusted gross margin expansion of 520 basis points versus prior year
  • Adjusted operating margin expansion of 290 basis points versus prior year
  • Adjusted earnings per share of $1.65

John D. Idol, the Company’s Chairman and Chief Executive Officer, said, "We are a year into the global pandemic that has profoundly impacted the entire world. Our thoughts and prayers remain with all those who have been affected. I am incredibly proud of our entire team and what Capri Holdings has been able to accomplish during this unprecedented time. Looking back over the last three quarters since the onset of COVID-19, we are encouraged by the performance of all our luxury houses, which illustrates the strength of our brands as well as the resilience and agility of our businesses."

Mr. Idol continued, "We were pleased with our third quarter results as revenue improved sequentially and exceeded our expectations. As we continued to execute on our strategic initiatives, earnings were meaningfully higher than anticipated driven by significant gross margin expansion. We also remain encouraged by the double digit increases in our customer databases as we continue to attract new consumers to each of our luxury houses."

Mr. Idol added, "As the world continues to emerge from this crisis, we are increasingly optimistic about the outlook for the fashion luxury industry and Capri Holdings. By fiscal 2023, we anticipate revenue and earnings per share will exceed pre-pandemic levels. We remain confident that our three luxury houses position Capri Holdings to deliver multiple years of revenue and earnings growth as well as increase shareholder value."

Mr. Idol concluded, “While the world is experiencing many difficulties, our values as an organization are more important than ever. To further our commitment to support diversity and inclusion, we are pleased to announce the creation of The Capri Holdings Foundation for the Advancement of Diversity in Fashion. We are donating $20 million to the foundation to foster and support programs designed to promote equality in the fashion industry, with a particular focus on underrepresented communities. We aspire for fashion to be open to all and are doing our part to create a more inclusive industry."

Third Quarter Fiscal 2021 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. Due to the current and ongoing impact of the COVID-19 pandemic, the company will not be providing comparable store sales results. The company believes the most comprehensive measure of performance in this environment is total revenues compared to the same period in the prior year.

Overview of Capri Holdings Third Quarter Fiscal 2021 Results:

  • Total revenue of $1.3 billion decreased 17.1% compared to last year. On a constant currency basis, total revenue decreased 19.5%.
  • Gross profit was $848 million and gross margin was 65.1%, compared to $932 million and 59.3% in the prior year. Adjusted gross profit was $843 million and adjusted gross margin was 64.7%, compared to $934 million and 59.5% in the prior year.
  • Income from operations was $167 million and operating margin was 12.8% compared to $205 million and 13.0% in the prior year. Adjusted income from operations was $257 million and operating margin was 19.7%, compared to $264 million and 16.8% in the prior year.
  • Net income was $179 million, or $1.18 per diluted share compared to $210 million, or $1.38 per diluted share in the prior year. Adjusted net income was $250 million, or $1.65 per diluted share, compared to $253 million or $1.66 per diluted share in the prior year.
  • Net inventory at December 26, 2020 was $789 million, an 18% decrease compared to the prior year.

Versace Third Quarter Fiscal 2021 Results:

  • Versace revenue of $195 million was flat compared to the prior year. On a constant currency basis, total revenue decreased 6.7%.
  • Versace operating income was $13 million and operating margin was 6.7% compared to a loss of $12 million and operating margin of (6.2)% in the prior year. Last year, adjusted operating loss was $10 million and adjusted operating margin was (5.1)%.

Jimmy Choo Third Quarter Fiscal 2021 Results:

  • Jimmy Choo revenue of $121 million decreased 26.7% compared to the prior year. On a constant currency basis, total revenue decreased 27.3%.
  • Jimmy Choo operating loss was $8 million and operating margin was (6.6)%, compared to an operating income of $9 million and operating margin of 5.5% in the prior year.

Michael Kors Third Quarter Fiscal 2021 Results:

  • Michael Kors revenue of $986 million decreased 18.6% compared to the prior year. On a constant currency basis, total revenue decreased 20.6%.
  • Michael Kors operating income was $281 million and operating margin was 28.5%, compared to $288 million and 23.8% in the prior year.

Fiscal Year 2021 Outlook

The company is not providing annual earnings guidance for fiscal year 2021 due to the lack of visibility surrounding the progression of the pandemic, macroeconomic fundamentals and tourism flows.

Conference Call Information

A conference call to discuss third quarter fiscal 2021 results is scheduled for today, February 3, 2021 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 February 10, 2021. 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 13714566. A replay of the webcast will also be available within two hours of the conclusion of the call.

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 that exclude certain costs associated with COVID-19 related charges, long-lived asset impairments, ERP implementation costs, Capri transformation costs, an inventory step-up adjustment, restructuring and other charges. 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 these 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 herein, may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. 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 effect of the COVID-19 pandemic and its potential material and significant impact on the Company’s future financial and operational results if retail stores are forced to close again and the pandemic is prolonged, including that our estimates could materially differ if the severity of the COVID-19 situation worsens, the length and severity of such outbreak across the globe and the pace of recovery following the COVID-19 pandemic, levels of cash flow and future availability of credit, compliance with restrictive covenants under the Company’s credit agreement, 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); 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 epidemics and pandemics, 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 Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2020 (File No. 001-35368). Any forward-looking statement in this press release speaks only as of the date made and 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

 

Nine Months Ended

 

 

December 26,
2020

 

December 28,
2019

 

December 26,
2020

 

December 28,
2019

Total revenue

 

$

1,302

 

 

$

1,571

 

 

$

2,863

 

 

$

4,359

 

Cost of goods sold

 

454

 

 

639

 

 

1,003

 

 

1,719

 

Gross profit

 

848

 

 

932

 

 

1,860

 

 

2,640

 

Total operating expenses

 

681

 

 

727

 

 

1,702

 

 

2,296

 

Income from operations

 

167

 

 

205

 

 

158

 

 

344

 

Other income, net

 

(3

)

 

(1

)

 

(4

)

 

(4

)

Interest expense, net

 

10

 

 

3

 

 

39

 

 

19

 

Foreign currency (gain) loss

 

(13

)

 

(2

)

 

(16

)

 

4

 

Income before provision for income taxes

 

173

 

 

205

 

 

139

 

 

325

 

(Benefit from) provision for income taxes

 

(5

)

 

(4

)

 

20

 

 

(2

)

Net income

 

178

 

 

209

 

 

119

 

 

327

 

Less: Net loss attributable to noncontrolling interests

 

(1

)

 

(1

)

 

(2

)

 

(1

)

Net income attributable to Capri

 

$

179

 

 

$

210

 

 

$

121

 

 

$

328

 

Weighted average ordinary shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

150,661,252

 

 

150,826,196

 

 

150,236,612

 

 

151,159,423

 

Diluted

 

151,958,057

 

 

152,154,372

 

 

151,417,457

 

 

152,354,936

 

Net income per ordinary share:

 

 

 

 

 

 

 

 

Basic

 

$

1.19

 

 

$

1.39

 

 

$

0.80

 

 

$

2.17

 

Diluted

 

$

1.18

 

 

$

1.38

 

 

$

0.80

 

 

$

2.15

 

SCHEDULE 2

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)

 

 

December 26,
2020

 

March 28,
2020

 

December 28,
2019

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

229

 

 

$

592

 

 

$

237

 

Receivables, net

 

369

 

 

308

 

 

321

 

Inventories, net

 

789

 

 

827

 

 

960

 

Prepaid expenses and other current assets

 

106

 

 

167

 

 

263

 

Total current assets

 

1,493

 

 

1,894

 

 

1,781

 

Property and equipment, net

 

518

 

 

561

 

 

596

 

Operating lease right-of-use assets

 

1,575

 

 

1,625

 

 

1,665

 

Intangible assets, net

 

2,102

 

 

1,986

 

 

2,225

 

Goodwill

 

1,615

 

 

1,488

 

 

1,681

 

Deferred tax assets

 

283

 

 

225

 

 

165

 

Other assets

 

179

 

 

167

 

 

212

 

Total assets

 

$

7,765

 

 

$

7,946

 

 

$

8,325

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

495

 

 

$

428

 

 

$

375

 

Accrued payroll and payroll related expenses

 

107

 

 

93

 

 

110

 

Accrued income taxes

 

66

 

 

42

 

 

30

 

Current operating lease liabilities

 

448

 

 

430

 

 

406

 

Short-term debt

 

169

 

 

167

 

 

1,031

 

Accrued expenses and other current liabilities

 

309

 

 

241

 

 

353

 

Total current liabilities

 

1,594

 

 

1,401

 

 

2,305

 

Long-term operating lease liabilities

 

1,724

 

 

1,758

 

 

1,751

 

Deferred tax liabilities

 

444

 

 

465

 

 

440

 

Long-term debt

 

1,243

 

 

2,012

 

 

1,085

 

Other long-term liabilities

 

405

 

 

142

 

 

133

 

Total liabilities

 

5,410

 

 

5,778

 

 

5,714

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

Ordinary shares, no par value; 650,000,000 shares authorized; 218,624,581 shares issued and 150,682,036 outstanding at December 26, 2020; 217,320,010 shares issued and 149,425,612 outstanding at March 28, 2020 and 216,906,643 shares issued and 149,012,245 outstanding at December 28, 2019

 

 

 

 

 

 

Treasury shares, at cost 67,942,545 shares at December 26, 2020, 67,894,398 shares at March 28, 2020 and 67,894,398 shares at December 28, 2019

 

(3,326

)

 

(3,325

)

 

(3,325

)

Additional paid-in capital

 

1,138

 

 

1,085

 

 

1,080

 

Accumulated other comprehensive income (loss)

 

91

 

 

75

 

 

(29

)

Retained earnings

 

4,453

 

 

4,332

 

 

4,883

 

Total shareholders’ equity of Capri

 

2,356

 

 

2,167

 

 

2,609

 

Noncontrolling interest

 

(1

)

 

1

 

 

2

 

Total shareholders’ equity

 

2,355

 

 

2,168

 

 

2,611

 

Total liabilities and shareholders’ equity

 

$

7,765

 

 

$

7,946

 

 

$

8,325

 

 

 

 

 

 

 

 

SCHEDULE 3

 

 

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

 

CONSOLIDATED SEGMENT DATA

 

($ in millions)

 

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

December 26,
2020

 

December 28,
2019

 

December 26,
2020

 

December 28,
2019

Revenue by Segment and Region:

 

 

 

 

 

 

 

 

 

Versace

The Americas

 

$

57

 

 

$

41

 

 

$

132

 

 

$

133

 

 

EMEA

 

76

 

 

98

 

 

183

 

 

311

 

 

Asia

 

62

 

 

56

 

 

168

 

 

186

 

Versace Revenue

 

 

195

 

 

195

 

 

483

 

 

630

 

 

 

 

 

 

 

 

 

 

 

Jimmy Choo

The Americas

 

32

 

 

34

 

 

71

 

 

85

 

 

EMEA

 

40

 

 

85

 

 

102

 

 

228

 

 

Asia

 

49

 

 

46

 

 

121

 

 

135

 

Jimmy Choo Revenue

 

 

121

 

 

165

 

 

294

 

 

448

 

 

 

 

 

 

 

 

 

 

 

Michael Kors

The Americas

 

671

 

 

834

 

 

1,321

 

 

2,222

 

 

EMEA

 

183

 

 

239

 

 

447

 

 

652

 

 

Asia

 

132

 

 

138

 

 

318

 

 

407

 

Michael Kors Revenue

 

 

986

 

 

1,211

 

 

2,086

 

 

3,281

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

$

1,302

 

 

$

1,571

 

 

$

2,863

 

 

$

4,359

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from Operations:

 

 

 

 

 

 

 

 

 

Versace

 

 

$

13

 

 

$

(12

)

 

$

(8

)

 

$

(6

)

Jimmy Choo

 

 

(8

)

 

9

 

 

(37

)

 

10

 

Michael Kors

 

 

281

 

 

288

 

 

423

 

 

711

 

Total segment income from operations

 

 

286

 

 

285

 

 

378

 

 

715

 

Less: Corporate expenses

 

 

(29

)

 

(46

)

 

(90

)

 

(114

)

Restructuring and other charges

 

 

(1

)

 

(15

)

 

(18

)

 

(37

)

Impairment of assets

 

 

(90

)

 

(19

)

 

(110

)

 

(220

)

COVID-19 related charges

 

 

1

 

 

 

 

(2

)

 

 

Total Income from Operations

 

 

$

167

 

 

$

205

 

 

$

158

 

 

$

344

 

 

 

 

 

 

 

 

 

 

 

Operating Margin:

 

 

 

 

 

 

 

 

 

Versace

 

 

6.7

%

 

(6.2

)%

 

(1.7

)%

 

(1.0

)%

Jimmy Choo

 

 

(6.6

)%

 

5.5

%

 

(12.6

)%

 

2.2

%

Michael Kors

 

 

28.5

%

 

23.8

%

 

20.3

%

 

21.7

%

Capri Operating Margin

 

 

12.8

%

 

13.0

%

 

5.5

%

 

7.9

%

SCHEDULE 4

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

SUPPLEMENTAL RETAIL STORE INFORMATION

(Unaudited)

 

 

 

 

As of

Retail Store Information:

 

December 26,
2020

 

December 28,
2019

Versace

 

217

 

 

208

 

Jimmy Choo

 

231

 

 

223

 

Michael Kors

 

831

 

 

846

 

Total number of retail stores

 

 

 

1,279

 

 

1,277

 

SCHEDULE 5

 

 

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

 

CONSTANT CURRENCY DATA

 

(In millions)

 

(Unaudited)

 

 

Three Months Ended

 

% Change

 

 

December 26,
2020

 

December 28,
2019

 

As
Reported

 

Constant
Currency

Total revenue:

 

 

 

 

 

 

 

 

 

Versace

 

$

195

 

 

$

195

 

 

%

 

(6.7)

%

Jimmy Choo

 

 

121

 

165

 

 

(26.7)

%

 

(27.3)

%

Michael Kors

 

 

986

 

1,211

 

 

(18.6)

%

 

(20.6)

%

Total revenue

 

$

1,302

 

 

$

1,571

 

 

(17.1)

%

 

(19.5)

%

 

 

 

Nine Months Ended

 

% Change

 

 

December 26,
2020

 

December 28,
2019

 

As
Reported

 

Constant
Currency

Total revenue:

 

 

 

 

 

 

 

 

Versace

 

$

483

 

 

$

630

 

 

(23.3)

%

 

(26.7)

%

Jimmy Choo

 

294

 

 

448

 

 

(34.4)

%

 

(35.7)

%

Michael Kors

 

2,086

 

 

3,281

 

 

(36.4)

%

 

(37.3)

%

Total revenue

 

$

2,863

 

 

$

4,359

 

 

(34.3)

%

 

(35.6)

%

 

 

 

 

 

 

 

 

 

SCHEDULE 6

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

(In millions, except share and per share data)

 

(Unaudited)

 

 

Three Months Ended December 26, 2020

 

 

As
Reported

 

Impairment
Charges

 

Restructuring
and Other
Charges (1)

 

COVID-19
Related
Charges

 

As
Adjusted

Gross profit

 

$

848

 

 

$

 

 

$

 

 

$

(5

)

 

$

843

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

681

 

 

$

(90

)

 

$

(1

)

 

$

(4

)

 

$

586

 

 

 

 

 

 

 

 

 

 

 

Total income from operations

 

$

167

 

 

$

90

 

 

$

1

 

 

$

(1

)

 

$

257

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

$

173

 

 

$

90

 

 

$

1

 

 

$

(1

)

 

$

263

(Benefit from) provision for income taxes

 

$

(5

)

 

$

19

 

 

$

(1

)

 

$

1

 

 

$

14

Net income attributable to Capri

 

$

179

 

 

$

71

 

 

$

2

 

 

$

(2

)

 

$

250

Diluted net income per ordinary share - Capri

 

$

1.18

 

 

$

0.47

 

 

$

0.01

 

 

$

(0.01

)

 

$

1.65

______________________

(1)

Includes store closure costs which have been incorporated into the Capri Retail Store Optimization Program, other restructuring initiatives, and other costs recorded in connection with the acquisitions of Gianni Versace S.r.l. and Jimmy Choo Group Limited.

SCHEDULE 7

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In millions, except share and per share data)

 

(Unaudited)

 

 

Nine Months Ended December 26, 2020

 

 

As
Reported

 

Impairment
Charges

 

Restructuring
and Other
Charges(1)

 

COVID-19
Related
Charges

 

Capri
Transformation

 

ERP
Implementation

 

As
Adjusted

Gross profit

 

$

1,860

 

$

 

 

$

 

 

$

(13

)

 

$

 

 

$

 

 

$

1,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

1,702

 

 

$

(110

)

 

$

(18

)

 

$

(15

)

 

$

(2

)

 

$

(2

)

 

$

1,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total income from operations

 

$

158

 

 

$

110

 

 

$

18

 

 

$

2

 

 

$

2

 

 

$

2

 

 

$

292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

$

139

 

 

$

110

 

 

$

18

 

 

$

2

 

 

$

2

 

 

$

2

 

 

$

273

Provision for (benefit from) income taxes

 

$

20

 

 

$

28

 

 

$

(2

)

 

$

(2

)

 

$

1

 

 

$

(1

)

 

$

44

Net income attributable to Capri

 

$

121

 

 

$

82

 

 

$

20

 

 

$

4

 

 

$

1

 

 

$

3

 

 

$

231

Diluted net income per ordinary share - Capri

 

$

0.80

 

 

$

0.53

 

 

$

0.13

 

 

$

0.03

 

 

$

0.01

 

 

$

0.02

 

 

$

1.52

______________________

(1)

Includes store closure costs which have been incorporated into the Capri Retail Store Optimization Program, other restructuring initiatives, and other costs recorded in connection with the acquisitions of Gianni Versace S.r.l. and Jimmy Choo Group Limited.

SCHEDULE 8

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

(In millions, except share and per share data)

(Unaudited)

 

 

Three Months Ended December 28, 2019

 

 

As
Reported

 

Impairment
Charges

 

Restructuring
and Other
Charges (1)

 

Inventory
Step-up
Adjustment

 

ERP
Implementation

 

Capri
Transformation

 

As
Adjusted

Gross profit

 

$

932

 

 

$

 

 

$

 

 

$

2

 

$

 

 

$

 

 

$

934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

727

 

 

$

(19

)

 

$

(15

)

 

$

 

$

(12

)

 

$

(11

)

 

$

670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Versace operating income

 

$

(12

)

 

$

 

 

$

 

 

$

2

 

$

 

 

$

 

 

$

(10

)

Total income from operations

 

$

205

 

 

$

19

 

 

$

15

 

 

$

2

 

$

12

 

 

$

11

 

 

$

264

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

$

205

 

 

$

19

 

 

$

15

 

 

$

2

 

$

12

 

 

$

11

 

 

$

264

 

(Benefit from) provision for income taxes

 

$

(4

)

 

$

7

 

 

$

3

 

 

$

 

$

3

 

 

$

3

 

 

$

12

 

Net income attributable to Capri

 

$

210

 

 

$

12

 

 

$

12

 

 

$

2

 

$

9

 

 

$

8

 

 

$

253

 

Diluted net income per ordinary share - Capri

 

$

1.38

 

 

$

0.08

 

 

$

0.08

 

 

$

0.01

 

$

0.06

 

 

$

0.05

 

 

$

1.66

 

______________________

(1)

Includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan and other restructuring initiatives, and other costs recorded in connection with the acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited.

SCHEDULE 9

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

(In millions, except share and per share data)

(Unaudited)

 

 

Nine Months Ended December 28, 2019

 

 

As Reported

 

Impairment
Charges

 

Restructuring
and Other
Charges(1)

 

Inventory
Step-up
Adjustment

 

ERP
Implementation

 

Capri
Transformation

 

Acquisition
Foreign
Currency
Effects

 

As
Adjusted

Gross profit

 

$

2,640

 

 

$

 

 

$

 

 

$

13

 

$

 

 

$

 

 

$

 

 

$

2,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

$

2,296

 

 

$

(220

)

 

$

(37

)

 

$

 

$

(29

)

 

$

(13

)

 

$

 

 

$

1,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Versace operating income

 

$

(6

)

 

$

 

 

$

 

 

$

13

 

$

 

 

$

 

 

$

 

 

$

7

Total income from operations

 

$

344

 

 

$

220

 

 

$

37

 

 

$

13

 

$

29

 

 

$

13

 

 

$

 

 

$

656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency loss (gain)

 

$

4

 

 

$

 

 

$

 

 

$

 

$

 

 

$

 

 

$

(1

)

 

$

3

Income before provision for income taxes

 

$

325

 

 

$

220

 

 

$

37

 

 

$

13

 

$

29

 

 

$

13

 

 

$

1

 

 

$

638

Provision for income taxes

 

$

(2

)

 

$

44

 

 

$

8

 

 

$

3

 

$

7

 

 

$

4

 

 

$

 

 

$

64

Net income attributable to Capri

 

$

328

 

 

$

176

 

 

$

29

 

 

$

10

 

$

22

 

 

$

9

 

 

$

1

 

 

$

575

Diluted net income per ordinary share - Capri

 

$

2.15

 

 

$

1.16

 

 

$

0.19

 

 

$

0.06

 

$

0.14

 

 

$

0.06

 

 

$

0.01

 

 

$

3.77

______________________

(1)

 

Includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan and other restructuring initiatives, and other costs recorded in connection with the acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited.

 

 

Investor Relations:
Jennifer Davis
+1 (201) 514-8234
Jennifer.Davis@CapriHoldings.com

Media:
Dinesh Kandiah
+1 (917) 934-2427
Press@CapriHoldings.com

Source: Capri Holdings Limited








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