Capri (US:CPRI)2025-11-04 21:10Revenue Performance - Total revenue for Michael Kors decreased to $725 million in Q3 2025 from $738 million in Q3 2024, representing a decline of 1.8%[156] - Total revenue for Jimmy Choo decreased to $131 million in Q3 2025 from $140 million in Q3 2024, representing a decline of 6.4%[156] - Total revenue for the company decreased to $856 million in Q3 2025 from $878 million in Q3 2024, representing a decline of 2.5%[156] - Total revenue decreased by $22 million, or 2.5%, to $856 million for the three months ended September 27, 2025, compared to $878 million for the same period in 2024[162] - Michael Kors revenue decreased by $13 million, or 1.8%, to $725 million, while Jimmy Choo revenue decreased by $9 million, or 6.4%[163] - Total revenue decreased by $73 million, or 4.2%, to $1.653 billion for the six months ended September 27, 2025, compared to $1.726 billion for the same period in 2024[182] - Michael Kors revenue decreased by $53 million, or 3.8%, to $1.360 billion for the six months ended September 27, 2025, while Jimmy Choo revenue decreased by $20 million, or 6.4%, to $293 million[186] Operating Performance - The company reported a loss from operations of $12 million in Q3 2025 compared to a loss of $6 million in Q3 2024[156] - The company experienced a significant loss from operations of $12 million for the three months ended September 27, 2025, compared to a loss of $6 million in the prior year[161] - Loss from operations was $12 million for the three months ended September 27, 2025, compared to a loss of $6 million for the same period in 2024, representing a 100% increase in loss[172] - Michael Kors recorded income from operations of $136 million for the six months ended September 27, 2025, down from $162 million in the prior year, with an operating margin decrease from 11.5% to 10.0%[197] Expenses - Cost of goods sold for Michael Kors increased to $295 million in Q3 2025 from $287 million in Q3 2024, an increase of 2.8%[156] - Selling, general and administrative expenses for Michael Kors decreased to $339 million in Q3 2025 from $344 million in Q3 2024, a decrease of 1.5%[156] - Total operating expenses decreased by $19 million, or 3.4%, to $534 million, representing 62.4% of total revenue[165] - Selling, general and administrative expenses decreased by $16 million, or 3.2%, to $481 million, accounting for 56.2% of total revenue[167] - Total operating expenses decreased by $57 million, or 5.3%, to $1.020 billion for the six months ended September 27, 2025, with a decrease in operating expenses as a percentage of total revenue from 62.4% to 61.7%[184] - Selling, general and administrative expenses decreased by $52 million, or 5.3%, to $936 million for the six months ended September 27, 2025, compared to $988 million for the same period in 2024[188] Profitability - Gross profit decreased by $25 million, or 4.6%, to $522 million, with a gross profit margin of 61.0% for the three months ended September 27, 2025[164] - Gross profit decreased by $58 million, or 5.4%, to $1.024 billion for the six months ended September 27, 2025, with gross profit margin at 61.9% compared to 62.7% in the prior year[183] - Michael Kors operating margin decreased from 11.8% to 10.1% for the three months ended September 27, 2025, while Jimmy Choo's operating margin worsened from a loss of 3.6% to 6.9%[176] Asset Impairment - Impairment of assets during the three months ended September 27, 2025, was $21 million, compared to $20 million in the same period last year[156] - Asset impairment charges recognized were $21 million for the three months ended September 27, 2025, compared to $20 million for the same period in 2024[169] - The company recognized asset impairment charges of $21 million for the six months ended September 27, 2025, compared to $20 million for the same period in 2024[190] Macroeconomic Factors - The company is facing macroeconomic conditions and inflationary pressures that are likely to impact consumer spending on luxury items[148] - The U.S. Government announced tariffs on imports from select countries, which could materially impact revenue and profitability[149] - The company anticipates continued challenges in demand for certain categories of fashion luxury goods, particularly in EMEA and Asia[163] Store Operations - The total number of retail stores decreased from 981 in 2024 to 907 in 2025, with a notable reduction in full-price retail stores[157] - The Americas region had 264 Michael Kors stores and 41 Jimmy Choo stores as of September 27, 2025[157] Cash Flow and Financing - Cash used in operating activities was $13 million for the six months ended September 27, 2025, compared to cash provided of $138 million for the same period in 2024[204] - Net cash provided by financing activities was $187 million during the six months ended September 27, 2025, compared to net cash used of $67 million in the prior year[206] - The company had cash and cash equivalents of $120 million as of September 27, 2025, up from $107 million as of March 29, 2025[203] Debt and Commitments - As of September 27, 2025, the company has $1.024 billion in borrowings outstanding under its 2022 Credit Facility and $724 million under its 2025 Term Loans[221] - The company has multiple fixed to fixed cross-currency swap agreements with an aggregate notional amount of $3.5 billion to hedge its net investment in CHF denominated subsidiaries[218] - The company recorded off-balance sheet commitments of $30 million related to outstanding letters of credit as of September 27, 2025[213] - The company has $30 million in off-balance sheet commitments related to letters of credit, with $29 million issued outside of the 2025 Credit Facilities[213] - The company is exposed to interest rate risk related to borrowings under its various credit facilities, with interest rates tied to different benchmarks[220] - The company has 17 financial institutions participating in its 2025 Credit Facilities, with no institution maintaining a maximum commitment percentage in excess of 10%[208]