# Michael Kors owner Capri cuts forecasts as demand slows, shares plunge 20%
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-08
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Michael Kors Owner Capri Holdings Cuts Profit Forecast
Meta Description: Capri Holdings Ltd, owner of Michael Kors, slashes profit forecast amidst declining demand for luxury handbags and apparel, impacting shares.
URL: https://financedigest.com/michael-kors-owner-capri-cuts-forecasts-as-demand-slows-shares-plunge-20html

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(Reuters) -Michael Kors owner Capri Holdings Ltd cut its annual profit forecast on Wednesday, hurt by a slowdown in demand for its luxury handbags and apparel in department stores, sending its shares tumbling 20% before the bell.

High-end fashion companies weathered decades-high inflation better than other industries for most of last year as affluent shoppers dipped into pandemic savings, but persistently increasing prices have now prompted even high-end spenders to stem their splurging on designer labels.

Industry experts have warned that accessible luxury brands like Michael Kors are likely to feel a bigger pinch than higher-priced brands like Hermes and Dior due to their core young customer base having less wealth than the luxury goods industry’s traditional clientele.

Michael Kors revenue from the Americas fell 4.5% to $777 [million in the company’s third quarter](https://www.financedigest.com/warner-bros-discovery-adds-2-million-subscribers-in-first-quarter.html "Warner Bros Discovery adds 2 million subscribers in first quarter") ended Dec. 31.

The [brand’s revenue from Asia fell nearly 18% as China’s decision to dismantle its zero-COVID policy late last year spurred a surge of infections in the world’s](https://www.financedigest.com/top-luxury-car-brands-in-the-world.html "Top luxury car brands in the world") second-largest economy and dulled store traffic.

Capri, which also owns the Jimmy Choo and Versace brands, said it now expects annual [sales of $5.56 billion](https://www.financedigest.com/allianz-puts-n26-stake-up-for-sale-at-3-billion-valuation-ft.html "Allianz puts N26 stake up for sale at  billion valuation – FT"), down from its prior estimate of $5.70 billion. It cut its earnings per [share forecast](https://www.financedigest.com/cisco-forecast-raise-allays-tech-spending-fears-lifts-shares.html "Cisco forecast raise allays tech spending fears, lifts shares") to $6.10 from $6.85.

The company earned $1.84 per share, [excluding items](https://www.financedigest.com/myhermes-boosts-smes-by-revising-cover-model-and-excluded-items-list.html "MyHermes Boosts SMEs By Revising Cover Model And Excluded Items List"), in the third quarter, missing analysts’ estimates of $2.22, according to Refinitiv IBES data.

It also forecast fiscal 2024 earnings per [share of $6.40 on revenue of $5.8 billion](https://www.financedigest.com/abb-to-launch-1-billion-share-buyback-on-april-3.html "ABB to launch  billion share buyback on April 3"). Analysts expect earnings per [share of $7.24 on revenue of $6.03 billion](https://www.financedigest.com/novartis-launches-new-11-billion-share-buyback.html "Novartis launches new  billion share buyback").

(Reporting by Uday Sampath and Anne Florentyna Gnanaraja Sekar in Bengaluru; Editing by Maju Samuel)


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