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Capri Holdings Limited Announces Second Quarter Fiscal 2025 Results

Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results for the second quarter of Fiscal 2025 ended September 28, 2024.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241107559622/en/

(Photo: Business Wire)

(Photo: Business Wire)

Second Quarter Fiscal 2025 Highlights

  • Revenue decreased 16.4% on a reported basis and 16.4% in constant currency
  • Adjusted operating margin of 3.0%
  • Adjusted earnings per share of $0.65

John D. Idol, the Company's Chairman and Chief Executive Officer, said, “Overall, we were disappointed with our second quarter results as performance continued to be impacted by softening demand globally for fashion luxury goods. Despite the challenging global retail environment, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across all three of our luxury houses.”

Mr. Idol continued, “Versace, Jimmy Choo and Michael Kors continued to resonate with consumers as evidenced by the 10.9 million new consumers added across our databases, representing 13% growth versus last year. This reflects the strong brand equity and enduring value of our three iconic houses.”

Mr. Idol concluded, “In August 2023 Capri Holdings announced that we entered into a definitive agreement to be acquired by Tapestry. The District Court recently granted the FTC’s motion for a preliminary injunction to enjoin the transaction pending the FTC’s in-house administrative proceeding. We are disappointed with the decision, and consistent with our obligations under the merger agreement, Tapestry and Capri have jointly filed a notice of appeal.”

Second Quarter Fiscal 2025 Results

Financial Results and non-GAAP Reconciliation

The Company’s results are reported in this press release in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and on an adjusted, non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information is provided at the end of this press release.

Overview of Capri Holdings Second Quarter Fiscal 2025 Results

  • Total revenue of $1.08 billion decreased 16.4% on both a reported and constant currency basis compared to last year. Total company retail sales declined high-single-digits with trends being impacted by softening demand globally for fashion luxury goods. In wholesale, revenue decreased double-digits driven by softer demand globally.
  • Gross profit was $694 million and gross margin was 64.3%, compared to $832 million and 64.4% in the prior year. Gross profit margin declined 10 basis points with favorable channel mix offset by lower full price sell-throughs.
  • Loss from operations was $38 million and operating margin was (3.5)%, compared to income from operations of $100 million and operating margin of 7.7% in the prior year. Adjusted income from operations was $32 million and adjusted operating margin was 3.0%, compared to $157 million and 12.2% in the prior year. The decline in operating margin primarily reflects expense deleverage on lower revenue.
  • Net income was $24 million, or $0.20 per diluted share, compared to net income of $90 million, or $0.77 per diluted share, in the prior year. Adjusted net income was $77 million, or $0.65 per diluted share, compared to $133 million, or $1.13 per diluted share, in the prior year period.
  • Net inventory as of September 28, 2024 was $984 million, a 10% decrease compared to the prior year.
  • Cash flow from operating activities for the second quarter was an inflow of $50 million, while free cash flow was an inflow of $23 million versus an outflow of $177 million last year.
  • Cash and cash equivalents totaled $182 million, and total borrowings outstanding were $1.71 billion, resulting in net debt of $1.53 billion versus $1.86 billion last year.

Versace Second Quarter Fiscal 2025 Results

  • Versace revenue of $201 million decreased 28.2% on both a reported basis and constant currency basis compared to prior year. Retail sales decreased high-teens while wholesale revenue decreased double-digits. Revenue in the Americas declined 33%, while revenue in EMEA decreased 28% and revenue in Asia declined 20%. Versace’s global database increased by 1.1 million new consumers, representing 16% growth over the last year.
  • Versace operating loss was $3 million and operating margin was (1.5)%, compared to operating income of $35 million and operating margin of 12.5% in the prior year. The decline in operating margin rate was primarily due to expense deleverage on lower revenue.

Jimmy Choo Second Quarter Fiscal 2025 Results

  • Jimmy Choo revenue of $140 million increased 6.1% on a reported basis and 5.3% on a constant currency basis compared to prior year. Retail sales decreased low-single-digits while wholesale revenue increased double-digits. Revenue in the Americas declined 8%, while revenue in EMEA increased 25% and revenue in Asia decreased 8%. Jimmy Choo’s global database increased by 0.7 million new consumers, representing 13% growth over the last year.
  • Jimmy Choo operating loss was $5 million and operating margin was (3.6)%, compared to operating loss of $9 million and operating margin of (6.8)% in the prior year. The improvement in operating margin rate was primarily due to expense leverage on higher revenue compared to the prior year.

Michael Kors Second Quarter Fiscal 2025 Results

  • Michael Kors revenue of $738 million decreased 16.0% on a reported basis and 15.9% on a constant currency basis compared to prior year. Retail sales decreased mid-single-digits while wholesale revenue declined double-digits. Revenue in the Americas decreased 12%, while revenue in EMEA declined 15% and revenue in Asia decreased 43%. Michael Kors’ global database increased by 9 million new consumers, representing 12% growth over the last year.
  • Michael Kors operating income was $87 million and operating margin was 11.8%, compared to $169 million and 19.2% in the prior year. The decline in operating margin rate was primarily related to expense deleverage on lower revenue.

Outlook and Conference Call

As previously stated, given the proposed merger transaction with a wholly owned subsidiary of Tapestry, Inc. (the “Merger”), and the pending appeal of the District Court's decision to grant the FTC's motion for a preliminary injunction with regards to the transaction, the Company is not providing financial guidance or hosting a conference call.

Use of Non-GAAP Financial Measures

Constant currency effects are non-GAAP financial measures, which are provided to supplement our reported operating results to facilitate comparisons of our operating results and trends in our business, excluding the effects of foreign currency rate fluctuations. Because we are a global company, foreign currency exchange rates may have a significant effect on our reported results. We calculate constant currency measures and the related foreign currency impacts by translating the current year’s reported amounts into comparable amounts using prior year’s foreign exchange rates for each currency. All constant currency performance measures discussed below should be considered a supplement to and not in lieu of our operating performance measures calculated in accordance with U.S. GAAP. Additionally, this earnings release includes certain non-GAAP financial measures that exclude certain costs associated with impairment charges, restructuring and other charges, ERP implementation costs, Capri transformation costs and costs related to the Merger. The Company uses non-GAAP financial measures, among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. The Company believes that excluding these items helps its management and investors compare operating performance based on its ongoing operations. While the Company considers the non-GAAP measures to be useful supplemental measures in analyzing its results, they are not intended to replace, nor act as a substitute for, any amounts presented in its consolidated financial statements prepared in conformity with U.S. GAAP and may be different from non-GAAP measures reported by other companies.

About Capri Holdings Limited

Capri Holdings is a global fashion luxury group consisting of iconic, founder-led brands Versace, Jimmy Choo and Michael Kors. Our commitment to glamorous style and craftsmanship is at the heart of each of our luxury brands. We have built our reputation on designing exceptional, innovative products that cover the full spectrum of fashion luxury categories. Our strength lies in the unique DNA and heritage of each of our brands, the diversity and passion of our people and our dedication to the clients and communities we serve. Capri Holdings Limited is publicly listed on the New York Stock Exchange under the ticker CPRI.

Forward Looking Statements

This press release contains statements which are, or may be deemed to be, “forward-looking statements.” Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Capri about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. All statements other than statements of historical facts included herein, may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions, which could cause actual results to differ materially from those projected or implied in any forward-looking statements, including regarding the proposed Merger. These risks, uncertainties and other factors include but are not limited to, our ability to respond to changing fashion, consumer traffic and retail trends; fluctuations in demand for our products; high consumer debt levels, recession and inflationary pressures; loss of market share and increased competition; reductions in our wholesale channel; the impact of the COVID-19 pandemic, or other unforeseen epidemics, pandemics, disasters or catastrophes; levels of cash flow and future availability of credit; Capri’s ability to successfully execute its growth strategies; departure of key employees or failure to attract and retain highly qualified personnel; risks associated with operating in international markets and global sourcing activities, including disruptions or delays in manufacturing or shipments; the risk of cybersecurity threats and privacy or data security breaches; extreme weather conditions and natural disasters; general economic, political, business or market conditions; acts of war and other geopolitical conflicts; the U.S. District Court for the Southern District of New York decision to grant the U.S. Federal Trade Commission's ("FTC") motion for a preliminary injunction to enjoin the Merger pending the completion of the FTC's in-house administrative proceeding (the "Preliminary Injunction"); the risk that the parties to the merger agreement may not be successful in their efforts to appeal the Preliminary Injunction and that the appeal may not be heard in a timely manner; the occurrence of any other event, change or other circumstances that could give rise to the termination of the merger agreement entered into in connection with the proposed Merger; the risk that the parties to the merger agreement may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all; the risk that if the Merger Agreement terminates our remedy may be limited to reimbursement of certain expenses or we may not be entitled to receive any reimbursement; risks related to disruption of management time from ongoing business operations due to the proposed Merger; the risk that any announcements relating to the proposed Merger (including the Preliminary Injunction and appeal process) could have adverse effects on the market price of Capri's ordinary shares; the significant costs, expenses and fees for professional services and other transaction costs in connection with the proposed Merger; the risk of any litigation relating to the proposed Merger; the risk that the proposed Merger could have an adverse effect on the ability of Capri to retain and maintain relationships with customers, suppliers and other business partners and retain and hire key personnel and on its operating results and business generally, as well as the risk factors identified in the Company's Annual Report on Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission. Please consult these documents for a more complete understanding of these risks and uncertainties. Any forward-looking statement in this press release speaks only as of the date made and Capri disclaims any obligation to update or revise any forward-looking or other statements contained herein other than in accordance with legal and regulatory obligations.

SCHEDULE 1

 

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

September 28,

2024

 

September 30,

2023

 

September 28,

2024

 

September 30,

2023

Total revenue

 

$

1,079

 

 

$

1,291

 

 

$

2,146

 

 

$

2,520

Cost of goods sold

 

 

385

 

 

 

459

 

 

 

763

 

 

 

876

Gross profit

 

 

694

 

 

 

832

 

 

 

1,383

 

 

 

1,644

Total operating expenses

 

 

732

 

 

 

732

 

 

 

1,429

 

 

 

1,464

(Loss) income from operations

 

 

(38

)

 

 

100

 

 

 

(46

)

 

 

180

Other income, net

 

 

 

 

 

(1

)

 

 

 

 

 

Interest (income) expense, net

 

 

(10

)

 

 

3

 

 

 

(14

)

 

 

11

Foreign currency (gain) loss

 

 

(17

)

 

 

(3

)

 

 

(12

)

 

 

18

(Loss) income before income taxes

 

 

(11

)

 

 

101

 

 

 

(20

)

 

 

151

(Benefit) provision for income taxes

 

 

(34

)

 

 

11

 

 

 

(31

)

 

 

13

Net income

 

 

23

 

 

 

90

 

 

 

11

 

 

 

138

Less: Net (loss) income attributable to noncontrolling interest

 

 

(1

)

 

 

 

 

 

1

 

 

 

Net income attributable to Capri

 

$

24

 

 

$

90

 

 

$

10

 

 

$

138

Weighted average ordinary shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

118,467,372

 

 

 

116,674,030

 

 

 

117,953,855

 

 

 

117,052,986

Diluted

 

 

118,777,723

 

 

 

117,563,573

 

 

 

118,517,098

 

 

 

117,923,103

Net income per ordinary share:

 

 

 

 

 

 

 

 

Basic

 

$

0.20

 

 

$

0.77

 

 

$

0.09

 

 

$

1.18

Diluted

 

$

0.20

 

 

$

0.77

 

 

$

0.09

 

 

$

1.17

SCHEDULE 2

 

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)

 

 

 

September 28,

2024

 

March 30,

2024

 

September 30,

2023

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

182

 

 

$

199

 

 

$

238

 

Receivables, net

 

 

298

 

 

 

332

 

 

 

383

 

Inventories, net

 

 

984

 

 

 

862

 

 

 

1,099

 

Prepaid expenses and other current assets

 

 

203

 

 

 

215

 

 

 

270

 

Total current assets

 

 

1,667

 

 

 

1,608

 

 

 

1,990

 

Property and equipment, net

 

 

565

 

 

 

579

 

 

 

542

 

Operating lease right-of-use assets

 

 

1,375

 

 

 

1,438

 

 

 

1,307

 

Intangible assets, net

 

 

1,418

 

 

 

1,394

 

 

 

1,676

 

Goodwill

 

 

1,153

 

 

 

1,106

 

 

 

1,268

 

Deferred tax assets

 

 

410

 

 

 

352

 

 

 

308

 

Other assets

 

 

204

 

 

 

212

 

 

 

255

 

Total assets

 

$

6,792

 

 

$

6,689

 

 

$

7,346

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

472

 

 

$

352

 

 

$

355

 

Accrued payroll and payroll related expenses

 

 

108

 

 

 

107

 

 

 

95

 

Accrued income taxes

 

 

37

 

 

 

64

 

 

 

82

 

Short-term operating lease liabilities

 

 

377

 

 

 

400

 

 

 

406

 

Short-term debt

 

 

471

 

 

 

462

 

 

 

15

 

Accrued expenses and other current liabilities

 

 

325

 

 

 

310

 

 

 

291

 

Total current liabilities

 

 

1,790

 

 

 

1,695

 

 

 

1,244

 

Long-term operating lease liabilities

 

 

1,387

 

 

 

1,452

 

 

 

1,291

 

Deferred tax liabilities

 

 

356

 

 

 

362

 

 

 

508

 

Long-term debt

 

 

1,237

 

 

 

1,261

 

 

 

2,079

 

Other long-term liabilities

 

 

536

 

 

 

319

 

 

 

312

 

Total liabilities

 

 

5,306

 

 

 

5,089

 

 

 

5,434

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

Ordinary shares, no par value; 650,000,000 shares authorized; 227,571,175 shares issued and 117,824,265 outstanding at September 28, 2024; 226,271,074 shares issued and 116,629,634 outstanding at March 30, 2024 and 225,768,777 shares issued and 116,140,358 outstanding at September 30, 2023

 

 

 

 

 

 

 

 

 

Treasury shares, at cost (109,746,910 shares at September 28, 2024, 109,641,440 shares at March 30, 2024 and 109,628,419 shares at September 30, 2023)

 

 

(5,462

)

 

 

(5,458

)

 

 

(5,457

)

Additional paid-in capital

 

 

1,454

 

 

 

1,417

 

 

 

1,392

 

Accumulated other comprehensive income

 

 

3

 

 

 

161

 

 

 

130

 

Retained earnings

 

 

5,489

 

 

 

5,479

 

 

 

5,846

 

Total shareholders’ equity of Capri

 

 

1,484

 

 

 

1,599

 

 

 

1,911

 

Noncontrolling interest

 

 

2

 

 

 

1

 

 

 

1

 

Total shareholders’ equity

 

 

1,486

 

 

 

1,600

 

 

 

1,912

 

Total liabilities and shareholders’ equity

 

$

6,792

 

 

$

6,689

 

 

$

7,346

 

SCHEDULE 3

 

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED SEGMENT DATA

($ in millions)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

September 28,

2024

 

September 30,

2023

 

September 28,

2024

 

September 30,

2023

Revenue by Segment and Region:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Versace

 

The Americas

 

$

64

 

 

$

96

 

 

$

134

 

 

$

178

 

 

 

EMEA

 

 

90

 

 

 

125

 

 

 

180

 

 

 

241

 

 

 

Asia

 

 

47

 

 

 

59

 

 

 

106

 

 

 

120

 

Versace Revenue

 

 

201

 

 

 

280

 

 

 

420

 

 

 

539

 

 

 

 

 

 

 

 

 

 

 

 

Jimmy Choo

 

The Americas

 

 

35

 

 

 

38

 

 

 

87

 

 

 

87

 

 

 

EMEA

 

 

71

 

 

 

57

 

 

 

148

 

 

 

138

 

 

 

Asia

 

 

34

 

 

 

37

 

 

 

78

 

 

 

90

 

Jimmy Choo Revenue

 

 

140

 

 

 

132

 

 

 

313

 

 

 

315

 

 

 

 

 

 

 

 

 

 

 

 

Michael Kors

 

The Americas

 

 

492

 

 

 

556

 

 

 

943

 

 

 

1,057

 

 

 

EMEA

 

 

187

 

 

 

219

 

 

 

325

 

 

 

394

 

 

 

Asia

 

 

59

 

 

 

104

 

 

 

145

 

 

 

215

 

Michael Kors Revenue

 

 

738

 

 

 

879

 

 

 

1,413

 

 

 

1,666

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

$

1,079

 

 

$

1,291

 

 

$

2,146

 

 

$

2,520

 

 

 

 

 

 

 

 

 

 

Income (loss) from Operations:

 

 

 

 

 

 

 

 

Versace

 

 

 

$

(3

)

 

$

35

 

 

$

(20

)

 

$

38

 

Jimmy Choo

 

 

 

 

(5

)

 

 

(9

)

 

 

(1

)

 

 

7

 

Michael Kors

 

 

 

 

87

 

 

 

169

 

 

 

162

 

 

 

299

 

Total segment income from operations

 

 

79

 

 

 

195

 

 

 

141

 

 

 

344

 

Less: Corporate expenses

 

 

(63

)

 

 

(71

)

 

 

(127

)

 

 

(142

)

Impairment of assets

 

 

(43

)

 

 

(20

)

 

 

(43

)

 

 

(20

)

Merger related costs

 

(10

)

 

 

(4

)

 

 

(15

)

 

 

(4

)

Restructuring and other (expense) income

 

 

(1

)

 

 

 

 

 

(2

)

 

 

2

 

Total (Loss) Income from Operations

 

$

(38

)

 

$

100

 

 

$

(46

)

 

$

180

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin:

 

 

 

 

 

 

 

 

 

 

Versace

 

 

 

 

(1.5

)%

 

 

12.5

%

 

 

(4.8

)%

 

 

7.1

%

Jimmy Choo

 

 

 

 

(3.6

)%

 

 

(6.8

)%

 

 

(0.3

)%

 

 

2.2

%

Michael Kors

 

 

 

 

11.8

%

 

 

19.2

%

 

 

11.5

%

 

 

17.9

%

Capri

 

 

 

 

(3.5

)%

 

 

7.7

%

 

 

(2.1

)%

 

 

7.1

%

SCHEDULE 4
 

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

SUPPLEMENTAL RETAIL STORE INFORMATION

(Unaudited)

 

 

 

As of

Retail Store Information:

 

September 28,

2024

 

September 30,

2023

Versace

 

236

 

230

Jimmy Choo

 

226

 

237

Michael Kors

 

755

 

802

Total number of retail stores

 

1,217

 

1,269

SCHEDULE 5

 

CAPRI HOLDINGS LIMITED AND SUBSIDIARIES

CONSTANT CURRENCY DATA

(In millions)

(Unaudited)

 

 

 

Three Months Ended

 

% Change

 

 

September 28,

2024

 

September 30,

2023

 

As

Reported

 

Constant

Currency

Total Revenue:

 

 

 

 

 

 

 

 

Versace

 

$

201

 

$

280

 

(28.2

)%

 

(28.2

)%

Jimmy Choo

 

 

140

 

 

132

 

6.1

%

 

5.3

%

Michael Kors

 

 

738

 

 

879

 

(16.0

)%

 

(15.9

)%

Total Revenue

 

$

1,079

 

$

1,291

 

(16.4

)%

 

(16.4

)%

 

 

Six Months Ended

 

% Change

 

 

September 28,

2024

 

September 30,

2023

 

As

Reported

 

Constant

Currency

Total Revenue:

 

 

 

 

 

 

 

 

Versace

 

$

420

 

$

539

 

(22.1

)%

 

(21.5

)%

Jimmy Choo

 

 

313

 

 

315

 

(0.6

)%

 

%

Michael Kors

 

 

1,413

 

 

1,666

 

(15.2

)%

 

(14.7

)%

Total Revenue

 

$

2,146

 

$

2,520

 

(14.8

)%

 

(14.3

)%

SCHEDULE 6

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

(Unaudited)

 

 

 

Three Months Ended September 28, 2024

 

 

As

Reported

 

Impairment Charges

 

Restructuring and Other Charges (1)

 

ERP Implementation(2)

 

Capri Transformation (3)

 

Merger Related Costs

 

As

Adjusted

Gross profit

 

$

694

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

732

 

 

$

(43

)

 

$

(1

)

 

$

(4

)

 

$

(12

)

 

$

(10

)

 

$

662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total (loss) income from operations

 

$

(38

)

 

$

43

 

 

$

1

 

 

$

4

 

 

$

12

 

 

$

10

 

 

$

32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before benefit for income taxes

 

$

(11

)

 

$

43

 

 

$

1

 

 

$

4

 

 

$

12

 

 

$

10

 

 

$

59

 

(Benefit) provision for income taxes

 

$

(34

)

 

$

10

 

 

$

 

 

$

1

 

 

$

3

 

 

$

3

 

 

$

(17

)

Net income attributable to Capri

 

$

24

 

 

$

33

 

 

$

1

 

 

$

3

 

 

$

9

 

 

$

7

 

 

$

77

 

Diluted net income per ordinary share - Capri

 

$

0.20

 

 

$

0.28

 

 

$

0.01

 

 

$

0.02

 

 

$

0.08

 

 

$

0.06

 

 

$

0.65

 

______________________

(1)

Amounts impacting operating expenses primarily relate to Global Optimization Plan lease termination and other store closure costs.

(2)

Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.

(3)

The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure. During Fiscal 2024, the remaining operational and IT projects were paused and we will reassess this program, along with related timing, during Fiscal 2025.

SCHEDULE 7

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

(Unaudited)

 

 

 

Six Months Ended September 28, 2024

 

 

As

Reported

 

Impairment Charges

 

Restructuring and Other Expense (1)

 

ERP Implementation (2)

 

Capri Transformation (3)

 

Merger Related Costs

 

As

Adjusted

Gross profit

 

$

1,383

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

1,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

1,429

 

 

$

(43

)

 

$

(2

)

 

$

(8

)

 

$

(26

)

 

$

(15

)

 

$

1,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total (loss) income from operations

 

$

(46

)

 

$

43

 

 

$

2

 

 

$

8

 

 

$

26

 

 

$

15

 

 

$

48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before benefit for income taxes

 

$

(20

)

 

$

43

 

 

$

2

 

 

$

8

 

 

$

26

 

 

$

15

 

 

$

74

 

(Benefit) provision for income taxes

 

$

(31

)

 

$

10

 

 

$

 

 

$

2

 

 

$

7

 

 

$

4

 

 

$

(8

)

Net income attributable to Capri

 

$

10

 

 

$

33

 

 

$

2

 

 

$

6

 

 

$

19

 

 

$

11

 

 

$

81

 

Diluted net income per ordinary share - Capri

 

$

0.09

 

 

$

0.28

 

 

$

0.02

 

 

$

0.05

 

 

$

0.16

 

 

$

0.09

 

 

$

0.69

 

______________________

(1)

Amounts impacting operating expenses primarily relate to Global Optimization Plan lease termination and store closure costs.

(2)

Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.

(3)

The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure. During Fiscal 2024, the remaining operational and IT projects were paused and we will reassess this program, along with related timing, during Fiscal 2025.

SCHEDULE 8

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

(Unaudited)

 

 

 

Three Months Ended September 30, 2023

 

 

As Reported

 

Impairment Charges

 

Restructuring and Other Charges (1)

 

ERP Implementation (2)

 

Capri Transformation (3)

 

Merger Related Costs

 

As Adjusted

Gross profit

 

$

832

 

 

$

 

 

$

 

$

 

 

$

 

 

$

 

 

$

832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

732

 

 

$

(20

)

 

$

 

$

(4

)

 

$

(29

)

 

$

(4

)

 

$

675

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total income from operations

 

$

100

 

 

 

20

 

 

$

 

$

4

 

 

$

29

 

 

$

4

 

 

$

157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency gain

 

$

(3

)

 

$

 

 

$

 

$

 

 

$

 

 

$

 

 

$

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

$

101

 

 

$

20

 

 

$

 

$

4

 

 

$

29

 

 

$

4

 

 

$

158

 

Provision for income taxes

 

$

11

 

 

$

4

 

 

$

 

$

1

 

 

$

8

 

 

$

1

 

 

$

25

 

Net income attributable to Capri

 

$

90

 

 

$

16

 

 

$

 

$

3

 

 

$

21

 

 

$

3

 

 

$

133

 

Diluted net income per ordinary share - Capri

 

$

0.77

 

 

$

0.13

 

 

$

 

$

0.03

 

 

$

0.18

 

 

$

0.02

 

 

$

1.13

 

______________________

(1)

Amounts impacting operating expenses primarily include a gain related to the termination of certain leases offset by expenses related to equity awards associated with the acquisition of Gianni Versace S.r.l.

(2)

Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.

(3)

The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure.

SCHEDULE 9

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In millions, except per share data)

(Unaudited)

 

 

 

Six Months Ended September 30, 2023

 

 

As Reported

 

Impairment Charges

 

Restructuring and Other Charges (1)

 

ERP

Implementation (2)

 

Capri

Transformation (3)

 

Merger Related Costs

 

As Adjusted

Gross profit

 

$

1,644

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

1,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

1,464

 

$

(20

)

 

$

2

 

 

$

(9

)

 

$

(57

)

 

$

(4

)

 

$

1,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total income from operations

 

$

180

 

$

20

 

 

$

(2

)

 

$

9

 

 

$

57

 

 

$

4

 

 

$

268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency loss

 

$

18

 

$

 

 

$

(17

)

 

$

 

 

$

 

 

$

 

 

$

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

$

151

 

$

20

 

 

$

15

 

 

$

9

 

 

$

57

 

 

$

4

 

 

$

256

Provision for income taxes

 

$

13

 

$

4

 

 

$

3

 

 

$

2

 

 

$

12

 

 

$

1

 

 

$

35

Net income attributable to Capri

 

$

138

 

$

16

 

 

$

12

 

 

$

7

 

 

$

45

 

 

$

3

 

 

$

221

Diluted net income per ordinary share - Capri

 

$

1.17

 

$

0.14

 

 

$

0.10

 

 

$

0.06

 

 

$

0.38

 

 

$

0.02

 

 

$

1.87

______________________

(1)

Amounts impacting operating expenses primarily includes a gain on the sale of a long-lived corporate asset partially offset by expenses related to equity awards associated with the acquisition of Gianni Versace S.r.l.. The foreign currency exchange loss represents a charge recognized in conjunction with restructuring activities to rationalize certain legal entities within our structure.

(2)

Represents a multi-year ERP implementation which includes accounting, finance and wholesale and retail inventory solutions in order to create standardized finance IT applications across our organization.

(3)

The Capri transformation program represents a multi-year, multi-project initiative extending through Fiscal 2026 intended to improve the operating effectiveness and efficiency of our organization by creating best in class shared platforms across our brands and by expanding our digital capabilities. These initiatives cover multiple aspects of our operations including supply chain, marketing, omni-channel customer experience, e-commerce, data analytics and IT infrastructure.

 

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