Core Viewpoint - Versace and Prada Group announced the appointment of Pieter Mulier as the Chief Creative Officer of Versace, effective July 1, indicating a strategic shift in the brand's creative direction amidst a complex luxury goods environment [1]. Company Summary - Pieter Mulier's appointment is seen as a significant leadership change for Versace, reflecting a reorientation of the brand's creative direction and long-term strategy [1]. - Mulier has a strong background in the fashion industry, having held key creative roles at notable fashion houses such as Jil Sander, Dior, and Calvin Klein [1].

Core Insights - The company reported a strong third quarter performance, exceeding expectations, with a focus on strategic initiatives for long-term brand success [1][4][20] - The sale of Versace was completed to strengthen financial foundations and reduce debt, ending the quarter with $80 million in net debt [4][25] - Total company revenue decreased by 4% year-over-year to $1.025 billion, with underlying gross margins expanding by 70 basis points due to improved full-price sell-throughs [4][21][23] Financial Performance - Total revenue for the third quarter was $1.025 billion, a decrease of 4% compared to the previous year [4][21] - Earnings per share increased approximately 30% to 81 cents [4] - Gross margin was reported at 60.8%, a decline of 230 basis points, but underlying gross margin expanded by 70 basis points [23][24] Brand Performance - Michael Kors revenue decreased by 5.6% year-over-year, with a modest sequential improvement in retail sales trends [5][22] - Jimmy Choo revenue increased by 5% year-over-year, driven by strong brand momentum and improved retail sales [14][22] - Retail sales for Michael Kors in Europe increased mid-single digits, while The Americas and Asia saw declines [6][22] Strategic Initiatives - The company is focused on enhancing brand desirability through storytelling and luxury product offerings [1][14] - A significant reduction in promotional activity has led to healthier sales mixes and higher average unit retail prices (AURs) [6][11] - The store renovation plan aims to redefine the luxury retail experience, with plans to renovate approximately 50% of the store fleet over the next three years [13] Consumer Engagement - The company has leveraged advanced data analytics to strengthen consumer engagement, resulting in an 8% year-over-year increase in the Michael Kors global consumer database [10] - Influencer-driven content has significantly increased, contributing to a nearly 300% rise in impressions and engagement [10][17] - Jimmy Choo's holiday campaign reached approximately 150 million consumers across social media platforms, enhancing brand awareness [16] Future Outlook - The company anticipates a return to growth in fiscal 2027, supported by strategic initiatives and improved retail trends [20][27] - Revenue guidance for fiscal 2026 is set between $3.45 billion and $3.475 billion, with expectations for gross margin expansion [26][27] - The focus remains on disciplined expense management and leveraging brand strengths to drive sustainable growth [27][79]

Financial Data and Key Metrics Changes - Total company revenue for Q3 fiscal 2026 was $1.025 billion, a decrease of 4% year-over-year and 5.9% in constant currency [22] - Earnings per share increased approximately 30% to $0.81 [7] - Gross margin was 60.8%, a decline of 230 basis points, but underlying gross margin expanded by 70 basis points due to better full price sell-throughs [24] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased 5.6% year-over-year, with retail sales down mid-single digits and wholesale sales also declining mid-single digits [23] - Jimmy Choo revenue increased 5% year-over-year, with retail sales improving sequentially and wholesale revenue growing double digits [23][15] - Michael Kors saw a healthier sales mix with higher average unit retail (AUR) and gross margins due to reduced promotional activity [8] Market Data and Key Metrics Changes - Revenue in the Americas for the company decreased 7%, while EMEA increased 5% and Asia decreased 4% [22] - Michael Kors revenue by geography showed a 9% decrease in the Americas, a 6% increase in EMEA, and a 1% decrease in Asia [23] - Jimmy Choo's revenue in the Americas increased 23%, while EMEA increased 3% and Asia decreased 10% [23] Company Strategy and Development Direction - The company completed the sale of Versace to strengthen its financial foundation and reduce debt, ending the quarter with $80 million in net debt [7][26] - Strategic initiatives focus on strengthening brand desirability through compelling storytelling and modern product offerings [5][6] - Plans to renovate approximately 50% of the store fleet over the next three years to enhance the luxury retail experience [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in fiscal 2027, supported by strategic initiatives and improved consumer engagement [6][28] - The company anticipates sequential improvement in retail trends in Q4 and a return to revenue growth in FY 2027 [21][28] - Management highlighted the importance of leveraging advanced data analytics to create deeper consumer connections [11] Other Important Information - The company expects year-end inventory levels to be approximately flat to the prior year, with a decrease in units offset by higher tariff rates [25] - Operating expenses decreased by $32 million, resulting in 80 basis points of expense leverage [25] Q&A Session Summary Question: Drivers of sequential improvement in Michael Kors retail sales - Management noted strategic initiatives are starting to take hold, with improved full price sell-throughs and reduced promotional activity leading to healthier business metrics [31][34] Question: Expected revenue growth next year - Management indicated cautious optimism for revenue growth, with expectations for continued sequential improvement in retail trends [40][46] Question: Performance by price range and age demographics - Management observed strong trends in the $150-$250 price range, particularly among Gen Z consumers, indicating a successful strategic pricing architecture [81] Question: Plans for free cash flow utilization - Management is focused on maintaining a healthy balance sheet and will consider options such as store updates and potential stock buybacks [91]

Financial Data and Key Metrics Changes - Total company revenue for Q3 fiscal 2026 was $1.025 billion, a decrease of 4% year-over-year and 5.9% in constant currency [20][21] - Gross margin was 60.8%, down 230 basis points, while underlying gross margin expanded by 70 basis points due to better full price sell-throughs and reduced promotional activity [22][24] - Earnings per share increased approximately 30% to $0.81 [5] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased 5.6% year-over-year, with retail sales down mid-single digits, while wholesale sales also declined mid-single digits [21][6] - Jimmy Choo revenue increased 5% year-over-year, with retail sales improving sequentially and wholesale revenue growing double digits [21][13] - Michael Kors experienced a double-digit increase in full price sales, while outlet revenue continued to be impacted by reduced promotional activity [6][11] Market Data and Key Metrics Changes - Revenue in the Americas decreased 7%, while EMEA increased 5% and Asia decreased 4% [20] - Michael Kors retail sales declined low double digits in the Americas, while Europe outperformed with mid-single-digit increases [8][21] - Jimmy Choo's retail revenue increased high single digits in the Americas and low single digits in Europe, with a sequential improvement in Asia [15][21] Company Strategy and Development Direction - The company completed the sale of Versace to strengthen its financial foundation and reduce debt, ending the quarter with $80 million of net debt [5][24] - Strategic initiatives focus on enhancing brand desirability through storytelling and modern product offerings, aiming for a return to growth in fiscal 2027 [4][19] - Plans to renovate approximately 50% of the store fleet over the next three years to enhance the luxury retail experience [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic initiatives leading to improved consumer engagement and brand equity [4][19] - Anticipated sequential improvement in retail trends for Q4 and a return to growth in fiscal 2027, supported by better full price sell-throughs and targeted price increases [19][26] - Management highlighted the importance of influencer marketing and social media in re-engaging consumers, particularly younger demographics [31][43] Other Important Information - The company expects fiscal 2026 revenue to be between $3.45 billion and $3.475 billion, with gross margin anticipated to be approximately 61% [24][25] - Operating expenses are expected to be slightly more than $2 billion, with operating income anticipated to be around $100 million [25] Q&A Session Summary Question: Drivers of sequential improvement in Michael Kors retail sales - Management noted strategic initiatives are starting to take hold, with improved full price sell-throughs and reduced promotional activity contributing to better sales [29][30] Question: Revenue growth expectations for next year - Management indicated a cautious optimism for revenue growth in FY 2027, driven by improved retail trends and strategic initiatives [35][36] Question: Operating margin expansion potential - Management expects operating margin expansion due to gross margin improvements and controlled SG&A expenses, despite challenges from reduced wholesale distribution [52][56] Question: Performance by price range and age demographics - Management highlighted strong trends in the $150-$250 price range, particularly among Gen Z consumers, and noted positive responses to new product offerings [78][80] Question: Plans for free cash flow utilization - Management plans to invest in store renovations and technology enhancements, with a share repurchase program authorized for FY 27 [91]

Core Insights - 1stDibs has released its 2025 Luxury E-Commerce Report, highlighting key trends in luxury categories such as Furniture & Lighting, Art, Watches & Jewelry, Handbags, and Fashion [1][2] Cross-Category Trends - There is a notable resurgence in Y2K and 2000s-era fashion, with "Sex and the City clothing" leading fashion-related searches, particularly after the debut of "And Just Like That" [4][8] - Significant growth in searches for 2000s fashion staples, including a 145% increase for "Prada heels 2009" in Q3 and a 112% increase for "Dior Saddle Bag" in Q1 [5][8] - Interest in classical glamour from early to mid-20th century aesthetics is rising, with Art Deco and Art Nouveau pieces gaining traction, particularly with a 99% increase in searches for "Art deco chandelier" in Q1 [7][8] Fashion Trends - Searches for Patek Philippe watches grew by 28% following new model announcements, while "old mine cut" rings saw a 27% spike after Taylor Swift's engagement ring reveal [8] - Western and Americana styles are gaining popularity, with searches for "navajo rugs" climbing 39% in Q1 and 32% in Q3, and turquoise jewelry seeing a 45% increase in Q3 [11][12] Bridal Trends - Timeless bridal fashion remains in demand, with "wedding gown dresses" being the most-searched clothing term of the year, and a 1950's Tiffany & Co. Emerald Cut Diamond Ring selling for $526,000 [13][14] Category-Specific Trends - Furniture and lighting trends are dominated by early to mid-20th century aesthetics, with a strong preference for Art Nouveau and Art Deco styles [15] - Legacy jewelry houses like Tiffany, Cartier, and Van Cleef & Arpels continue to lead in sales, with Tiffany seeing a 4% increase in orders [17] - Hermès remains a dominant player in the handbag market, with the most expensive sale being a Hermes Kelly 25 listed at $88,990 [8][17]

Industry Environment - The domestic mid-to-high-end women's clothing market is witnessing the emergence of new brands that attract high-net-worth customers through differentiated positioning and high-quality materials [2] - Brands like AWPROJECT and CHICJOC are expanding rapidly, with AWPROJECT focusing on urban women and CHICJOC implementing a "luxury alternative" strategy to achieve high repurchase rates [2] - International brands such as AnnAndelman are accelerating their presence in the Chinese market, leveraging unique designs and online-offline integration to drive market reshuffling [2] Outdoor Lifestyle Migration - Over 500 million participants are engaged in outdoor sports in China, with a shift in consumer logic towards multi-scenario adaptability, sustainability, and emotional value [3] - The outdoor apparel market is growing at an annual rate of 49%, with consumers prioritizing durability, environmental friendliness, and multifunctionality [3] - Future trends include the proliferation of smart equipment, community integration, and the "no-trace outdoor" concept, driving professional development in the industry [3] Fast Fashion Trends - The fast fashion industry is undergoing significant changes by 2025, characterized by three main trends: premiumization, acceleration, and technology-driven innovation [5] - International brands like Uniqlo and H&M are entering the high-end market through price increases and collaborations, while local brands are expanding overseas [5] - The integration of online and offline channels is deepening, with brands utilizing AI technology in design, warehousing, and marketing to enhance efficiency [5] Luxury Goods Market - The luxury goods sector is experiencing a "store opening wave," with brands like CHANEL and Louis Vuitton opening new stores in China, indicating signs of recovery [7] - The Asia-Pacific market, particularly China, is a key growth driver, while the Japanese market shows mixed performance due to currency and tourism impacts [7] - Brands are focusing on core markets and accelerating localization marketing to strengthen cultural resonance [7] Consumer Behavior Shifts - Consumers are increasingly prioritizing functionality and brand trust over mere trends, as evidenced by the popularity of high-value down jackets [4] - The success of Sam's Club's down jackets reflects a new rational consumption trend where consumers value core needs like warmth and cost-effectiveness [4] - The shift in women's shopping behavior towards men's and children's clothing highlights a growing demand for quality and practicality over traditional fashion norms [13] Jewelry Market Trends - The jewelry market is witnessing a resurgence of retro styles, with a focus on emotional resonance and personalized design appealing to younger consumers [14] - The global jewelry market is expected to grow, with the U.S. and U.K. projected annual growth rates of 1.78% and 3.35%, respectively [14] - The industry is transitioning from "material consumption" to "spiritual consumption," emphasizing the balance between craftsmanship and emotional needs [15] Brand Dynamics - The luxury e-commerce platform Mile has acquired the bankrupt fashion retailer Matches, aiming to reshape luxury retail with a new business model [24] - Scottish luxury cashmere brand Begg x Co is expanding into the Chinese market through a strategic partnership with Meizui, launching its official Tmall flagship store [25] - Sequoia China has acquired a controlling stake in the fashion brand Golden Goose, aiming to support its global expansion and strengthen its market position [26]

Core Insights - Prada has completed the acquisition of Versace for €1.25 billion, with all regulatory checks finalized [2] - Lorenzo Bertelli, Prada's Chief Marketing Officer, has been appointed as the CEO of Versace [2] Financial Summary - Prada has secured a €1.5 billion financing agreement, which includes a €1 billion term loan and up to €500 million in a revolving credit facility, with €1 billion and €300 million already drawn [4] - Additionally, a €200 million bilateral term loan agreement has been established for seven years, with the full amount already withdrawn [4] - As of March 29, 2025, Versace is projected to achieve revenues of €705 million, with an operating loss of €46 million and long-term assets valued at €878 million [4] - For the third quarter, Prada reported revenues of €4.07 billion, reflecting an 8.5% increase at constant exchange rates, with third-quarter revenues of €1.33 billion, up 7.6% at constant exchange rates [4] - Retail sales for Prada decreased by 1.6% year-on-year, while Miu Miu's retail sales increased by 41% [4] Strategic Considerations - Despite both brands being Italian luxury labels, there are significant differences in market positioning and design styles [4] - The acquisition is expected to create synergies, but Versace's recent underperformance adds uncertainty to the integration process [4]

Investment Rating - The report maintains a positive outlook on domestic and international liquidity, particularly favoring the technology and trading platform sectors in the cryptocurrency space [1]. Core Views - The report highlights a cautious optimism regarding the recovery of high-end consumption in the luxury goods and gaming sectors, driven by wealth effects and a rebound in Macau's gaming revenue [3]. - The education sector is experiencing increased competition due to a rise in domestic small institutions, while leading companies are stabilizing their capabilities [3]. - The coffee sector remains robust, with high growth in coffee bean imports, while the tea beverage sector faces short-term pressure due to reduced subsidies from delivery platforms [3]. - E-commerce is under pressure from the domestic consumption environment, with overall performance remaining flat [3]. - The report suggests continued interest in music streaming platforms as quality internet assets driven by domestic demand [3]. - The virtual asset and trading platform sectors are experiencing volatility, with a cautious stance recommended in the short term, while maintaining a long-term optimistic view on blockchain and cryptocurrency markets [3]. - The automotive aftermarket is facing a decline in value and service frequency, warranting ongoing attention [3]. - The report emphasizes the potential of the Macau tourism sector, which is expected to benefit from a declining interest rate cycle [3]. - The report expresses confidence in the AI and cloud sectors, anticipating further advancements in AI applications [3]. Summary by Sections 1.1 Consumer & Internet - **Education**: The Chinese education index fell by 1.44%, underperforming major indices, with notable stock movements among key players [9]. - **Luxury Goods & Gaming**: The S&P Global Luxury Goods Index rose by 0.81%, with significant developments in the acquisition of Versace by Prada [19][21]. - **Coffee & Tea**: The Hang Seng Non-Essential Consumer Index showed a cumulative increase of 0.74%, with mixed performances among key coffee and tea brands [25]. - **E-commerce**: The sector is facing challenges, with a flat performance noted in the overall market [3]. 1.2 Platforms & Technology - **Streaming Platforms**: The Hang Seng Media Index increased by 0.89%, with varied performances among major streaming companies [35]. - **Virtual Assets & Internet Brokers**: The global cryptocurrency market cap reached $321.51 billion, with Bitcoin and Ethereum prices showing slight declines [42]. - **Automotive Services**: The automotive aftermarket is experiencing a decline, with a 5% drop in both output value and service frequency [54]. 1.3 Media - The media sector is expected to see growth resilience in gaming, with a focus on product releases in December [3].

Group 1: Nike's Leadership Restructuring - Nike has restructured its senior leadership team as part of its "Win Now" strategy to enhance execution and reduce management layers [2][3] - Venkatesh Alagirisamy has been promoted to COO, overseeing supply chain, operations, manufacturing, sustainability, and technology, with the CTO role being removed from the CEO's reporting line [3] - The restructuring includes the exit of two EVPs, Craig Williams and Muge Dogan, with the CCO role being eliminated entirely [3][4] - Nike's four regional heads will now report directly to CEO Elliott Hill, and sales will report to CFO Matt Friend, aiming for tighter integration of operations and technology [4] Group 2: Burberry's Executive Appointments - Burberry has appointed Matteo Calonaci as chief operating and supply chain officer and Johnattan Leon as chief customer officer [5][6] - Calonaci will oversee supply chain, planning, strategy, transformation, and data analytics, succeeding Klaus Bierbrauer [6] - Leon will lead customer engagement, service, and retail excellence teams, transitioning from his role as senior vice president of commercial [7][8] Group 3: Versace's Creative Director Change - Following the Prada Group's acquisition of Versace, Dario Vitale, the creative director, is stepping down after eight months in the role [9] - Until a new creative director is appointed, the design team will report directly to Versace CEO Emmanuel Gintzburger [9]

Group 1 - Versace's creative director Dario Vitale is leaving the brand after only months in the role [1]