Capri: Kors, Versace

“For its fiscal fourth quarter, the Michael Kors-parent reported non-GAAP EPS of $1.02 that beat estimates by $0.20, while revenue that rose over 24% to reach $1.49B also pushed past estimates by $80M. The key driver of the sales beat was Versace, which saw a 34% surge in sales, while profits were boosted by pricing moves that helped operating margins expand 230 basis points. “Capri Holdings achieved the highest revenue, gross margin and earnings per share in the company’s history,” CEO John Idol said. “Our ability to deliver record results while navigating the challenges of an unprecedented global pandemic is a testament to the strength of our brands and the success of our strategic growth initiatives.”While net inventory rose 48.9% from the prior year, a typically bearish signal in recent retail earnings, management noted that this increase was in line with expectations as sales growth in Michael Kors and Versace continue to trend in the high 20-30 percent range.Shares rose about 5% shortly after the luxury retailer released its earnings report."Looking forward in fiscal 2023 we expect to achieve another year of record revenue and earnings per share,” Idol said. “Longer term we are confident in our ability to resume double digit revenue increases as we move beyond the impact of current macro headwinds.”Idol stressed the resilience of luxury retail in inflationary environments and the ability of the company to pass on costs to its affluent customer base. This pricing power and continued demand bolstered his confidence in offering bullish guidance for the year ahead.”