Completed Acquisition of Versace
Third Quarter Adjusted Earnings per Share
Exceed Expectations
Capri Holdings Limited (NYSE:CPRI), a global fashion luxury
group, today announced its financial results for the third quarter
of fiscal 2019 ended December 29, 2018.
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VERSACE (Photo: Business Wire)
Third Quarter Fiscal 2019 Highlights
- Adjusted earnings per share of $1.76
were above expectations
- Raised prior adjusted earnings per
share guidance excluding Versace
- Completed Versace acquisition and
expanded global fashion luxury group
John D. Idol, the Company’s Chairman and Chief Executive
Officer, said, “We are extremely pleased to have recently renamed
our Company Capri Holdings Limited and completed the acquisition of
Versace. In the quarter, Jimmy Choo delivered strong performance,
as we continued to execute on our accelerated growth plans. In
Michael Kors, we remain focused on executing our Runway 2020
strategic initiatives and expect our efforts will return the brand
to growth next year. For full year fiscal 2019, our luxury group is
expected to deliver both double digit revenue and adjusted earnings
per share growth. Taken together, we believe our three iconic,
founder-led fashion brands position Capri Holdings to accelerate
revenue to $8 billion dollars and deliver multiple years of
earnings growth."
Third Quarter Fiscal 2019 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 Third
Quarter Fiscal 2019 Results:
- Total revenue of $1.44 billion was
approximately flat compared to last year, including an incremental
month of Jimmy Choo revenue of $39.3 million. On a constant
currency basis, total revenue increased 1.1%.
- Gross profit was $873.2 million and
gross margin was 60.7%, compared to $884.0 million and 61.4% in the
prior year. Adjusted gross profit was $874.1 million and adjusted
gross margin was 60.8%, compared to $885.6 million and 61.5% in the
prior year.
- Income from operations was $290.0
million and operating margin was 20.2% compared to $313.5 million
and 21.8% in the prior year. Adjusted income from operations was
$316.5 million and operating margin was 22.0%, compared to $345.7
million and 24.0% in the prior year.
- Net income was $199.6 million, or $1.33
per diluted share compared to $219.4 million, or $1.42 per diluted
share in the prior year. Adjusted net income was $264.7 million, or
$1.76 per diluted share, compared to $273.4 million or $1.77 per
diluted share in the prior year.
Michael Kors Segments Third Quarter
Fiscal 2019 Results:
- Michael Kors Retail revenue of $838.0
million decreased 1.0% compared to the prior year. Comparable store
sales decreased 2.4%, which was in line with expectations. On a
constant currency basis, comparable store sales decreased
1.0%.
- Michael Kors Retail operating income
was $149.9 million and operating margin was 17.9%, compared to
$180.4 million and 21.3% in the prior year. Adjusted operating
income was $162.5 million while adjusted operating margin was
19.4%, compared to $194.0 million and 22.9% in the prior year.
- Michael Kors Wholesale revenue declined
8.3% to $394.9 million compared to the prior year.
- Michael Kors Wholesale operating income
was $108.6 million and operating margin was 27.5%, compared to
$100.5 million and 23.3% in the prior year. On an adjusted basis
operating income was $111.2 million while adjusted operating margin
was 28.2% compared to 107.8 million and 25.0% in the prior
year.
- Michael Kors Licensing revenue
decreased 9.9% to $43.5 million compared to the prior year.
- Michael Kors Licensing operating income
was $26.0 million and operating margin was 59.8%, compared to $26.9
million and 55.7% in the prior year. On an adjusted basis operating
income was $26.4 million and operating margin was 60.7%, compared
to $28.2 million and 58.4% in the prior year.
- Inventory for the Michael Kors brand at
December 29, 2018 was $606.2 million, an 8.2% increase as compared
to the prior year.
Jimmy Choo Third Quarter Fiscal 2019
Results:
- Jimmy Choo revenue was $161.6 million.
The Company acquired Jimmy Choo on November 1, 2017, and compared
to Jimmy Choo stand-alone results from the prior year, revenue
increased mid single digits.
- Jimmy Choo operating income was $5.5
million and adjusted operating income was $16.4 million.
- Inventory for the Jimmy Choo brand at
December 29, 2018 was $158.5 million, a 35.3% increase as compared
to the prior year.
Share Repurchase Program
During the third quarter, the Company repurchased approximately
2.1 million of the Company's ordinary shares for approximately
$100.0 million in open market transactions. As
of December 31, 2018 the remaining availability under the
Company’s share repurchase program was $442.2 million.
Outlook
The following guidance is provided on an adjusted, non-GAAP
basis. Fiscal 2019 guidance includes projected Versace results
subsequent to the closing of the acquisition on December 31, 2018.
Guidance includes Versace results for two months, as the Company
will report Versace on a one month lag, and includes a full three
months of interest costs related to the acquisition.
For the full year, the Company expects total revenue to be
approximately $5.22 billion. Michael Kors revenue is expected to be
approximately $4.51 billion, including a low single digit
comparable store sales decline. Jimmy Choo revenue is now expected
to be approximately $580 million, a slight reduction from prior
guidance reflecting an unfavorable foreign currency impact. Versace
revenue is expected to be approximately $130 million. The Company
now expects an operating margin of approximately 17.3%, reflecting
brand operating margins of approximately 19.5% for Michael Kors,
4.8% for Jimmy Choo and slightly negative for Versace. The Company
is updating its full year earnings per share guidance to be in a
range of $4.90 to $4.95, including $0.15 of dilution from the
Versace acquisition, partly offset by a $0.05 increase to previous
guidance for the pre-acquisition business, reflecting third quarter
results. This guidance continues to include dilution from Jimmy
Choo of $0.05 to flat. Earnings per share guidance assumes
approximately 152 million weighted average diluted shares
outstanding, including the 2.4 million shares issued to the Versace
family in connection with the acquisition and an effective tax rate
of approximately 13.0%.
For the fiscal fourth quarter of 2019, the Company expects total
revenue of approximately $1.33 billion. Michael Kors revenue is
expected to be approximately $1.07 billion, including a low single
digit decline in reported comparable sales close to the higher end
of the range. Michael Kors constant currency comparable sales are
expected to decline close to the low end of the low single digits
range. Jimmy Choo revenue is expected to be approximately $130
million, including a comparable sales increase in the low single
digits on a reported basis and mid single digits on a constant
currency basis. Versace revenue is expected to be approximately
$130 million. Operating margin is expected to be approximately
10.3%, reflecting brand operating margins of approximately 13.6%
for Michael Kors, negative 4.5% for Jimmy Choo and slightly
negative for Versace. Diluted earnings per share are expected to be
in the range of $0.56 to $0.61, which includes approximately $0.15
of dilution from Versace. Earnings per share guidance assumes
approximately 153 million weighted average diluted shares
outstanding and an effective tax rate of approximately 20.0%.
While the Company normally provides long term expectations at
our Investor Day, given the recent acquisition of Versace the
Company believes it is important to update its expectations for
Capri Holdings and has added a table to this earnings release
outlining the major components of its anticipated growth. For
fiscal 2020, the Company expects total revenue to be approximately
$6.1 billion, including approximately $900 million for Versace,
$650 million for Jimmy Choo and $4.55 billion for Michael Kors. The
Company expects an operating margin of approximately 15.5%. Diluted
earnings per share are expected to be approximately $4.95. For
Capri Holdings, beyond Fiscal 2020, the Company expects to deliver
accelerated revenue and earnings per share growth. The Company
believes these results will be driven by revenue growth for
Versace, Jimmy Choo and Michael Kors, as well as expanded margins
from Versace and Jimmy Choo, and looks forward to providing
additional guidance and long term expectations at its Investor Day
in June.
Conference Call Information
A conference call to discuss third quarter results is scheduled
for today, February 6, 2019 at 8:30 a.m. ET. A live webcast of
the conference call will be available on the Company’s website,
www.capriholdings.com. In addition, a replay will be available
shortly after the conclusion of the call and remain available until
February 13, 2019. To access the telephone replay, listeners should
dial 1-844-512-2921 or 1-412-317-6671 for international callers.
The access code for the replay is 4719600. A replay of the webcast
will also be available within two hours of the conclusion of the
call and will remain on the website for 90 days.
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 relating to certain one-time
costs associated with the Jimmy Choo acquisition and the Versace
acquisition and restructuring and non-cash impairment charges
primarily associated with underperforming retail stores. 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 non-recurring 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 Limited is a global fashion luxury group,
consisting of iconic brands that are industry leaders in design,
style and craftsmanship. Its brands cover the full spectrum of
fashion luxury categories including women’s and men’s accessories,
footwear and ready-to-wear as well as wearable technology, watches,
jewelry, eyewear and a full line of fragrance products. The
Company’s goal is to continue to extend the global reach of its
brands while ensuring that they maintain their independence and
exclusive DNA. 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 Holdings Limited (the
“Company”) 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 in this press release may be
forward-looking statements. Without limitation, any statements
preceded or followed by or that include the words “targets”,
“plans”, “believes”, “expects”, “aims”, “intends”, “will”,
“should”, “could”, “would”, “may”, “anticipates”, “estimates”,
“synergy”, “cost-saving”, “projects”, “goal”, “strategy”, “budget”,
“forecast” or “might” or, words or terms of similar substance or
the negative thereof, are forward-looking statements.
Forward-looking statements include statements relating to future
capital expenditures, expenses, revenues, earnings, economic
performance, indebtedness, financial condition, share buybacks,
dividend policy, losses and future prospects of the Company,
business and management strategies and the expansion and growth of
the Company’s operations, and benefits from any acquisition. These
forward-looking statements are not guarantees of future financial
performance. 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. These
risks, uncertainties and other factors include the Company’s
ability to integrate successfully and to achieve anticipated
benefits of any acquisition; the risk of disruptions to the
Company’s businesses; the negative effects of events on the market
price of the Company’s ordinary shares and its operating results;
significant transaction costs; unknown liabilities; the risk of
litigation and/or regulatory actions related to the Company’s
businesses; fluctuations in demand for the Company’s products;
levels of indebtedness (including the indebtedness incurred in
connection with acquisitions); future availability of credit; the
timing and scope of future share buybacks, which may be made in
open market or privately negotiated transactions, and are subject
to market conditions, applicable legal requirements, trading
restrictions under the Company’s insider trading policy and other
relevant factors, and which share repurchases may be suspended or
discontinued at any time, the level of other investing activities
and uses of cash; changes in consumer traffic and retail trends;
loss of market share and industry competition; fluctuations in the
capital markets; fluctuations in interest and exchange rates; the
occurrence of unforeseen disasters or catastrophes; political or
economic instability in principal markets; adverse outcomes in
litigation; and general, local and global economic, political,
business and market conditions, as well as those risks set forth in
the reports that the Company files from time to time with the U.S.
Securities and Exchange Commission, including the Company’s Annual
Report on Form 10-K for the fiscal year ended March 31, 2018 (File
No. 001-35368). The Company 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
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In millions, except share and per share
data)(Unaudited)
Three Months Ended Nine Months
Ended December 29,2018 December 30,2017 December 29,2018
December 30,2017 Total revenue $ 1,438.0 $ 1,440.1 $ 3,894.3
$ 3,539.1 Cost of goods sold 564.8 556.1 1,507.2
1,389.6 Gross profit 873.2 884.0 2,387.1 2,149.5
Total operating expenses 583.2 570.5 1,692.5
1,487.5 Income from operations 290.0 313.5 694.6 662.0 Other
income, net (1.4 ) (0.1 ) (3.7 ) (1.0 ) Interest expense, net 7.7
8.3 21.1 10.2 Foreign currency loss (gain) 42.6 27.0
78.5 (14.7 ) Income before provision for income taxes 241.1
278.3 598.7 667.5 Provision for income taxes 41.7 58.9
76.0 119.9 Net income 199.4 219.4 522.7 547.6
Less: Net loss attributable to noncontrolling interests (0.2 ) —
(0.9 ) (0.2 ) Net income attributable to Capri $ 199.6
$ 219.4 $ 523.6 $ 547.8 Weighted
average ordinary shares outstanding: Basic 149,183,049 152,047,963
149,420,087 152,772,067 Diluted 150,268,424 154,623,339 151,457,921
155,220,984 Net income per ordinary share: Basic $ 1.34 $ 1.44 $
3.50 $ 3.59 Diluted $ 1.33 $ 1.42 $ 3.46 $ 3.53
SCHEDULE 2
CAPRI HOLDINGS LIMITED AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In millions,
except share data)(Unaudited)
December 29,2018 March 31,2018 December
30,2017
Assets Current assets Cash and cash equivalents $
264.5 $ 163.1 $ 317.1 Receivables, net 291.2 290.5 288.0
Inventories 764.7 660.7 677.2 Prepaid expenses and other current
assets 2,119.1 147.8 162.3 Total current
assets 3,439.5 1,262.1 1,444.6 Property and equipment, net 543.6
583.2 599.4 Intangible assets, net 1,132.9 1,235.7 1,215.4 Goodwill
780.0 847.7 822.0 Deferred tax assets 47.2 56.2 64.7 Other assets
85.2 74.1 70.7 Total assets $ 6,028.4 $
4,059.0 $ 4,216.8
Liabilities and Shareholders’
Equity Current liabilities Accounts payable $ 329.0 $ 294.1 $
290.2 Accrued payroll and payroll related expenses 99.2 93.0 85.7
Accrued income taxes 22.5 77.6 68.7 Short-term debt 579.4 200.0 0.1
Accrued expenses and other current liabilities 357.3 295.6
277.4 Total current liabilities 1,387.4 960.3 722.1
Deferred rent 130.6 128.4 134.8 Deferred tax liabilities 181.6
186.3 217.0 Long-term debt 1,954.7 674.4 992.4 Other long-term
liabilities 107.0 88.1 70.2 Total liabilities
3,761.3 2,037.5 2,136.5 Commitments and contingencies Shareholders’
equity Ordinary shares, no par value; 650,000,000 shares
authorized; 213,432,129 shares issued and 148,313,496 outstanding
at December 29, 2018; 210,991,091 shares issued and 149,698,407
outstanding at March 31, 2018, and 210,302,628 shares issued and
152,167,403 outstanding at December 30, 2017 — — — Treasury shares,
at cost (65,118,633 shares at December 29, 2018; 61,292,684 shares
at March 31, 2018; and 58,135,225 shares at December 30, 2017)
(3,223.1 ) (3,015.9 ) (2,815.9 ) Additional paid-in capital 892.4
831.1 803.3 Accumulated other comprehensive (loss) income (92.9 )
50.5 (18.4 ) Retained earnings 4,687.3 4,152.0
4,107.9 Total shareholders’ equity of Capri 2,263.7 2,017.7
2,076.9 Noncontrolling interest 3.4 3.8 3.4
Total shareholders’ equity 2,267.1 2,021.5 2,080.3
Total liabilities and shareholders’ equity $ 6,028.4
$ 4,059.0 $ 4,216.8
SCHEDULE 3
CAPRI HOLDINGS LIMITED AND
SUBSIDIARIESCONSOLIDATED SEGMENT DATA($ in
millions)(Unaudited)
Three Months Ended Nine Months Ended December
29,2018 December 30,2017 December 29,2018 December
30,2017
Revenue by Segment and Region: MK Retail The
Americas $ 557.1 $ 558.0 $ 1,354.2 $ 1,335.6 Europe 163.9 168.0
422.6 444.3 Asia 117.0 120.3 344.6 331.3
MK Retail Revenue 838.0 846.3 2,121.4 2,111.2
MK Wholesale The Americas 311.4 338.2 940.8 905.8 EMEA 66.3 81.2
215.6 250.7 Asia 17.2 11.4 59.1 41.5
MK Wholesale Revenue 394.9 430.8 1,215.5 1,198.0 MK
Licensing The Americas 29.2 29.4 67.6 70.2 EMEA 14.3 18.9
38.8 45.0
MK Licensing Revenue 43.5
48.3 106.4 115.2
Michael Kors
Revenue 1,276.4 1,325.4 3,443.3 3,424.4 Jimmy Choo The
Americas 29.1 21.0 75.1 21.0 EMEA 89.7 65.0 248.2 65.0 Asia 42.8
28.7 127.7 28.7
Jimmy Choo
Revenue 161.6 114.7 451.0 114.7
Total Revenue $ 1,438.0 $
1,440.1 $ 3,894.3 $
3,539.1 Income from Operations: MK
Retail $ 149.9 $ 180.4 $ 310.3 $ 341.6 MK Wholesale 108.6 100.5
336.2 263.6 MK Licensing 26.0 26.9 44.9 51.1
Michael Kors 284.5 307.8 691.4 656.3 Jimmy Choo 5.5
5.7 3.2 5.7
Total Income from
Operations $ 290.0 $ 313.5
$ 694.6 $ 662.0
Operating Margin: MK Retail 17.9 % 21.3 % 14.6 % 16.2
% MK Wholesale 27.5 % 23.3 % 27.7 % 22.0 % MK Licensing 59.8 % 55.7
% 42.2 % 44.4 % Michael Kors 22.3 % 23.2 % 20.1 % 19.2 % Jimmy Choo
3.4 % 5.0 % 0.7 % 5.0 %
Total Operating Margin 20.2
% 21.8 % 17.8 % 18.7
%
SCHEDULE 4
CAPRI HOLDINGS LIMITED AND
SUBSIDIARIESSUPPLEMENTAL RETAIL STORE
INFORMATION(Unaudited)
December 29, 2018
Retail Store Information: Store Count Square Footage
The Americas 401 1,381,279 Europe 198 535,627 Asia 271
589,912 Michael Kors 870 2,506,818 Jimmy Choo 206 267,407
Total Capri 1,076 2,774,225
SCHEDULE 5
CAPRI HOLDINGS LIMITED AND
SUBSIDIARIESCONSTANT CURRENCY DATA(In
millions)
Three Months Ended % Change December
29,2018 December 30,2017
AsReported
ConstantCurrency
Total revenue: MK Retail $ 838.0 $ 846.3 (1.0)% 0.3% MK Wholesale
394.9 430.8 (8.3)% (7.8)% MK Licensing 43.5 48.3 (9.9)% (9.9)%
Michael Kors 1,276.4 1,325.4 (3.7)% (2.7)% Jimmy Choo 161.6 114.7
NM NM
Total revenue $ 1,438.0 $
1,440.1 (0.1)% 1.1%
Nine Months Ended
% Change
December 29,2018
December 30,2017
AsReported
ConstantCurrency
Total revenue: MK Retail $ 2,121.4 $2,111.2 0.5% 0.5% MK Wholesale
1,215.5 1,198.0 1.5% 1.4% MK Licensing 106.4 115.2 (7.6)% (7.6)%
Michael Kors 3,443.3 3,424.4 0.6% 0.5% Jimmy Choo 451.0 114.7 NM NM
Total revenue $ 3,894.3 $3,539.1
10.0% 10.2%
___________________NM Not meaningful
SCHEDULE 6
NON-GAAP RECONCILIATIONS OF REPORTED TO
ADJUSTED MEASURES,EXCLUDING LONG-LIVED ASSET IMPAIRMENTS,
RESTRUCTURING AND OTHER CHARGES,INVENTORY STEP-UP RELATED TO
JIMMY CHOO ACQUISITION, ANDFOREIGN CURRENCY EFFECTS RELATED
TO VERSACE ACQUISITION(In millions, except share and per
share data)(Unaudited)
Three Months Ended December 29, 2018 As Reported
ImpairmentCharges
Restructuringand OtherCharges(1)
InventoryStep-upAdjustment
AcquisitionForeignCurrencyEffects
As Adjusted Jimmy Choo gross profit $ 107.0 $ — $ — $ 0.9
$ — $ 107.9 Total gross profit $ 873.2 $ — $ — $ 0.9 $ — $
874.1 Michael Kors operating expense $ 481.6 $ (5.4 ) $
(10.2 ) $ — $ — $ 466.0 Jimmy Choo operating expense 101.6
(0.5 ) (9.5 ) — — 91.6 Total operating expenses $
583.2 $ (5.9 ) $ (19.7 ) $ — $ — $ 557.6
MK Retail operating income $ 149.9 $ 5.4 $ 7.2 $ — $ — $
162.5 MK Wholesale operating income 108.6 — 2.6 — — 111.2 MK
Licensing operating income 26.0 — 0.4 —
— 26.4 Michael Kors operating income 284.5 5.4 10.2 — —
300.1 Jimmy Choo operating income 5.5 0.5 9.5
0.9 — 16.4 Total income from operations $ 290.0
$ 5.9 $ 19.7 $ 0.9 $ — $ 316.5
Foreign currency loss $ 42.6 $ — $ — $ — $ (42.1 ) $ 0.5
Income before provision for income taxes $ 241.1 $ 5.9 $ 19.7 $ 0.9
$ 42.1 $ 309.7 Provision for income taxes $ 41.7 $ 1.5 $ 2.7 $ 0.2
$ (0.9 ) $ 45.2 Net income attributable to Capri $ 199.6 $ 4.4 $
17.0 $ 0.7 $ 43.0 $ 264.7 Diluted net income per ordinary share -
Capri $ 1.33 $ 0.03 $ 0.11 $ — $ 0.29 $ 1.76
______________________ (1) Includes store closure costs
recorded in connection with the Retail Fleet Optimization Plan and
other restructuring initiatives, and transaction and transition
costs recorded in connection with the acquisitions of Jimmy Choo
Group Limited and Gianni Versace S.p.A.
SCHEDULE 7
NON-GAAP RECONCILIATIONS OF REPORTED TO
ADJUSTED MEASURES,EXCLUDING LONG-LIVED ASSET IMPAIRMENTS,
RESTRUCTURING AND OTHER CHARGES,INVENTORY STEP-UP RELATED TO
JIMMY CHOO ACQUISITION, ANDFOREIGN CURRENCY EFFECTS RELATED
TO VERSACE ACQUISITION(In millions, except share and per
share data)(Unaudited)
Nine Months Ended December 29, 2018 As Reported
ImpairmentCharges
Restructuringand OtherCharges(1)
InventoryStep-upAdjustment
AcquisitionForeignCurrencyEffects
As Adjusted Gross profit $ 2,387.1 $ — $ — $ 5.6 $ —
$ 2,392.7 Michael Kors operating expense $ 1,394.0 $ (15.4 )
$ (26.1 ) $ — $ — $ 1,352.5 Jimmy Choo operating expense 298.5
(1.8 ) (23.1 ) — — 273.6 Total operating
expenses $ 1,692.5 $ (17.2 ) $ (49.2 ) $ — $ —
$ 1,626.1 MK Retail operating income $ 310.3 $ 15.4 $ 17.8 $
— $ — $ 343.5 MK Wholesale operating income 336.2 — 7.1 — — 343.3
MK Licensing operating income 44.9 — 1.2 —
— 46.1 Michael Kors operating income 691.4 15.4 26.1
— — 732.9 Jimmy Choo operating income 3.2 1.8 23.1
5.6 — 33.7 Total income from operations $
694.6 $ 17.2 $ 49.2 $ 5.6 $ — $
766.6 Foreign currency loss $ 78.5 $ — $ — $ — $ (72.5 ) $
6.0 Income before provision for income taxes $ 598.7 $ 17.2 $ 49.2
$ 5.6 $ 72.5 $ 743.2 Provision for income taxes $ 76.0 $ 3.4 $ 6.7
$ 1.1 $ (0.9 ) $ 86.3 Net income attributable to Capri $ 523.6 $
13.8 $ 42.5 $ 4.5 $ 73.4 $ 657.8 Diluted net income per ordinary
share - Capri $ 3.46 $ 0.09 $ 0.28 $ 0.03 $ 0.49 $ 4.35
______________________ (1) Includes store closure costs
recorded in connection with the Retail Fleet Optimization Plan and
other restructuring initiatives, and transaction and transition
costs recorded in connection with the acquisitions of Jimmy Choo
Group Limited and Gianni Versace S.p.A.
SCHEDULE 8
NON-GAAP RECONCILIATIONS OF REPORTED TO
ADJUSTED MEASURES,EXCLUDING LONG-LIVED ASSET
IMPAIRMENTS,RESTRUCTURING AND OTHER CHARGES,INVENTORY
STEP-UP RELATED TO JIMMY CHOO ACQUISITION, ANDDERIVATIVE
CONTRACT RELATED TO ACQUISITION OF JIMMY CHOO(In millions,
except share and per share data)(Unaudited)
Three Months Ended December 30, 2017 As Reported
ImpairmentCharges
Restructuringand OtherCharges(1)
InventoryStep-upAdjustment
AcquisitionPriceDerivativeContract
As Adjusted Jimmy Choo gross profit $ 72.5 $ — $ — $ 1.6 $ —
$ 74.1 Total gross profit $ 884.0 $ — $ — $ 1.6 $ — $ 885.6
Michael Kors operating expense $ 503.6 $ (2.6 ) $ (19.6 ) $ — $ — $
481.4 Jimmy Choo operating expense 66.9 — (8.4 ) —
— 58.5 Total operating expenses $ 570.5
$ (2.6 ) $ (28.0 ) $ — $ — $ 539.9 MK
Retail operating income $ 180.4 $ 2.6 $ 11.0 $ — $ — $ 194.0 MK
Wholesale operating income 100.5 — 7.3 — — 107.8 MK Licensing
operating income 26.9 — 1.3 — —
28.2 Michael Kors operating income 307.8 2.6 19.6 — — 330.0
Jimmy Choo operating income 5.7 — 8.4 1.6
— 15.7 Total income from operations $ 313.5
$ 2.6 $ 28.0 $ 1.6 $ — $ 345.7
Foreign currency loss (gain) $ 27.0 $ — $ — $ — $
(32.0 ) $ (5.0 ) Income before provision for income taxes $ 278.3 $
2.6 $ 28.0 $ 1.6 $ 32.0 $ 342.5 Provision for income taxes $ 58.9 $
0.5 $ 3.3 $ 0.3 $ 6.1 $ 69.1 Net income attributable to Capri $
219.4 $ 2.1 $ 24.7 $ 1.3 $ 25.9 $ 273.4 Diluted net income per
ordinary share - Capri $ 1.42 $ 0.01 $ 0.16 $ 0.01 $ 0.17 $ 1.77
______________________ (1) Includes store closure
costs recorded in connection with the Michael Kors Retail Fleet
Optimization Plan, as well as transaction and transition costs
recorded in connection with the acquisition of Jimmy Choo Group
Limited.
SCHEDULE 9
NON-GAAP RECONCILIATIONS OF REPORTED TO
ADJUSTED MEASURES,EXCLUDING LONG-LIVED ASSET
IMPAIRMENTS,RESTRUCTURING AND OTHER CHARGES,INVENTORY
STEP-UP RELATED TO JIMMY CHOO ACQUISITION, ANDDERIVATIVE
CONTRACT RELATED TO ACQUISITION OF JIMMY CHOO(In millions,
except share and per share data)(Unaudited)
Nine Months Ended December 30, 2017 As Reported
ImpairmentCharges
Restructuringand OtherCharges(1)
InventoryStep-upAdjustment
AcquisitionPriceDerivativeContract
As Adjusted Gross profit $ 2,149.5 $ — $ — $ 1.6 $ —
$ 2,151.1 Michael Kors operating expense $ 1,420.6 $ (18.9 )
$ (42.9 ) $ — $ — $ 1,358.8 Jimmy Choo operating expense 66.9
— (8.4 ) — — 58.5 Total
operating expenses $ 1,487.5 $ (18.9 ) $ (51.3 ) $ —
$ — $ 1,417.3 MK Retail operating income $
341.6 $ 18.9 $ 25.4 $ — $ — $ 385.9 MK Wholesale operating income
263.6 — 14.9 — — 278.5 MK Licensing operating income 51.1 —
2.6 — — 53.7 Michael Kors
operating income 656.3 18.9 42.9 — — 718.1 Jimmy Choo operating
income 5.7 — 8.4 1.6 — 15.7
Total income from operations $ 662.0 $ 18.9 $
51.3 $ 1.6 $ — $ 733.8 Foreign
currency gain $ (14.7 ) $ — $ — $ — $ 4.7 $ (10.0 ) Income before
provision for income taxes $ 667.5 $ 18.9 $ 51.3 $ 1.6 $ (4.7 ) $
734.6 Provision for income taxes $ 119.9 $ 3.4 $ 7.6 $ 0.3 $ (0.9 )
$ 130.3 Net income attributable to Capri $ 547.8 $ 15.5 $ 43.7 $
1.3 $ (3.8 ) $ 604.5 Diluted net income per ordinary share - Capri
$ 3.53 $ 0.10 $ 0.28 $ 0.01 $ (0.03 ) $ 3.89
______________________ (1) Includes store closure costs
recorded in connection with the Michael Kors Retail Fleet
Optimization Plan, as well as transaction and transition costs
recorded in connection with the acquisition of Jimmy Choo Group
Limited.
SCHEDULE 10
CAPRI FINANCIAL OUTLOOK
FY 2020 FY
2021 FY 2022 REVENUE
APPROXIMATELY $6.1B MID SINGLE DIGIT GROWTH
MID SINGLE DIGIT GROWTH
MK REVENUE
APPROXIMATELY $4.55B LOW SINGLE DIGIT GROWTH
LOW SINGLE DIGIT GROWTH
JC REVENUE APPROXIMATELY
$650M DOUBLE DIGIT GROWTH DOUBLE DIGIT GROWTH
VERSACE
REVENUE APPROXIMATELY $900M DOUBLE
DIGIT GROWTH DOUBLE DIGIT GROWTH
ADJUSTED
OPERATING MARGIN* APPROXIMATELY 15.5%
APPROXIMATELY 16% APPROXIMATELY 17%
MK
OPERATING MARGIN* STABLE STABLE STABLE
JC OPERATING
MARGIN* IMPROVING HIGH SINGLE DIGITS MID TEENS
VERSACE
OPERATING MARGIN* FLAT MID SINGLE
DIGITS LOW DOUBLE DIGITS
ADJUSTED NET INCOME*
LOW SINGLE DIGIT GROWTH DOUBLE DIGIT
GROWTH DOUBLE DIGIT GROWTH
ADJUSTED EPS*
APPROXIMATELY $4.95 DOUBLE DIGIT GROWTH
DOUBLE DIGIT GROWTH
*US GAAP RESULTS ADJUSTED FOR SPECIAL ITEMS
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190206005189/en/
Investor Relations:Katina Metzidakis(201)
514-8234InvestorRelations@CapriHoldings.comMedia:Dinesh
Kandiah(917) 934-2427Press@CapriHoldings.com
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