Michael Kors Parent's Inventory Rises 66%; Q1 Earnings Top Estimates

Capri Holdings Ltd CPRI reported first-quarter FY23 sales growth of 8.5% year-on-year to $1.36 billion, beating the consensus of $1.29 billion.
Versace revenue increased 14.6% Y/Y to $275 million, Jimmy Choo revenue rose 21.1% to $172 million, and Michael Kors revenue expanded 4.8% to $913 million.
Gross profit rose 5.3% Y/Y to $901 million, and gross margin contracted 200 basis points to 66.3%. Adjusted gross margin contracted 190 basis points to 66.2%.
The operating margin was 17%, and operating income for the quarter amounted to $231 million.
Operating expenses increased 12% Y/Y to $670 million.
The company held $221 million in cash and equivalents as of July 2, 2022.
Adjusted EPS of $1.50 beat the analyst consensus of $1.36.
Net inventory on July 2, 2022, was $1.265 billion, a 66% increase Y/Y.
Outlook: Capri sees FY23 sales of about $5.85 billion versus the consensus of $5.84 billion.
Capri expects FY23 EPS of about $6.85, against the consensus of $6.74.
The company sees Q2 sales of about $1.4 billion versus the estimate of $1.39 billion. It expects Q2 EPS of about $1.55 versus the estimate of $1.55.
Price Action: CPRI shares are trading lower by 5.57% at $48.15 on the last check Tuesday.

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