With Versace headed for the exit — through a $1.4 billion sale to Prada — Capri Holdings is turning toward its own future with Michael Kors and Jimmy Choo.
And chief executive officer John Idol said the company had more traction in the fiscal second quarter than it did at the start of the year.
Revenue for the quarter ended Sept. 27 fell 2.5 percent to $856 million.
In constant currencies, sales fell 4.2 percent — an improvement from the 7.7 percent logged in the first quarter.
Adjusted operating income totaled $20 million, for an operating margin of 2.3 percent, down from 4.2 percent a year earlier.
Net losses totaled $34 million.
“We are encouraged by our second quarter results,” Idol said in a statement. “Trends continued to improve sequentially, which resulted in revenue, gross margin and operating income exceeding our expectations. This performance demonstrates the progress we are making as we execute against our strategic initiatives to energize our fashion luxury houses.
“With the Versace sale expected to close in our fiscal third quarter, we are now fully focused on the growth of our two iconic brands, Michael Kors and Jimmy Choo,” he said. “We plan to use the proceeds of the sale to repay the majority of our debt, substantially strengthening our balance sheet and providing greater financial flexibility to both invest in our growth as well as return capital to shareholders in the future.”
Michael Kors’ revenues fell 1.8 percent to $725 million, a decline of 3.3 percent in constant currencies during the quarter.
Jimmy Choo revenues slipped 6.4 percent to $131 million, a drop of 9.3 percent in constant currencies.
Idol said retail trends would improve in the second half and that the company would return to growth next year.
Shares of Capri fell 2.8 percent to $20.14 in early trading on Wall Street even though the company offered a little something extra to shareholders — a three-year, $1 billion share repurchase plan that will have the firm in the market to buy its own stock.
