Capri Holdings Limited (NYSE: CPRI) reported Q4 EPS of $0.38, $0.36 better than the analyst estimate of $0.02. Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.02 billion.

Fourth Quarter Fiscal 2021 Highlights

• Revenue was flat to prior year, a sequential improvement relative to the third quarter
  • Retail sales increased 13% globally, with growth across all three luxury houses
  • E-Commerce sales improved sequentially, increasing approximately 80%
• Adjusted gross margin expanded 280 basis points versus prior year, with margin expansion across all luxury houses
• Adjusted operating margin expansion of 360 basis points to 11.9%
• Adjusted earnings per share of $0.38

John D. Idol, the Company’s Chairman and Chief Executive Officer, said, "Looking back on fiscal 2021, the COVID-19 pandemic has had a profound effect on the entire world. The unprecedented challenges tested our business and industry in ways we could never have imagined. Despite these challenges, we were encouraged by the performance of all three of our luxury houses, with revenue and earnings significantly exceeding our expectations. These results are a testament to the strength of our brands as well as the dedication, resilience and agility of the entire Capri Holdings team."

Mr. Idol continued, “We were pleased with our fourth quarter results as revenue improved sequentially and exceeded our expectations. Retail sales increased 13% versus prior year, driven by an improvement in both E-Commerce and store sales. As we continued to execute on our strategic initiatives, earnings were higher than anticipated driven by better revenue results and gross margin expansion across all three of our luxury houses."

Mr. Idol added, “During the year, we reevaluated and refined Capri Holding’s strategic direction to ensure the company emerges from the pandemic stronger and more profitable. For Versace and Jimmy Choo, we reaffirmed our long term plans and are even more enthusiastic about the prospects of these luxury houses. For Michael Kors, we recalibrated our plans to further elevate the brand positioning and deliver higher profit margins.”

Mr. Idol concluded, “Looking forward, we remain optimistic about the outlook for the fashion luxury industry and Capri Holdings. As the world starts to recover from the pandemic, we are confident in our growth opportunities for Versace, Jimmy Choo and Michael Kors. We believe our three luxury houses position Capri Holdings to deliver multiple years of revenue and earnings growth, as well as increase shareholder value.”

GUIDANCE:

Capri Holdings Limited sees Q1 2022 EPS of $0.75, versus the consensus of $0.55. Capri Holdings Limited sees Q1 2022 revenue of $1.1 billion, versus the consensus of $1.01 billion.

Capri Holdings Limited sees FY2022 EPS of $3.70-$3.80, versus the consensus of $3.72. Capri Holdings Limited sees FY2022 revenue of $5.1 billion, versus the consensus of $4.99 billion.

For First Quarter Fiscal 2022 Outlook, the Company expects the following.

• Total revenue of approximately $1.1 billion
• Gross margin contraction of approximately 100 basis points, primarily due to higher wholesale channel mix
• Operating margin of approximately 12%
• Net interest expense of approximately $5 million
• Effective tax rate of approximately 9%
• Weighted average diluted shares outstanding of approximately 155 million
• Diluted earnings per share of approximately $0.75

For Fiscal Year 2022 Outlook, the Company expects the following.

• Total revenue of approximately $5.1 billion
• Gross margin expansion of approximately 50 basis points, reflecting benefits from strategic initiatives, partially offset by higher transportation costs
• Operating margin of approximately 14%
• Net interest expense of approximately $20 million
• Effective tax rate of approximately 15%
• Weighted average diluted shares outstanding of approximately 156 million
• Diluted earnings per share of approximately $3.70 to $3.80
• Capital expenditures of approximately $200 million

For earnings history and earnings-related data on Capri Holdings Limited (CPRI) click here.