Michael Kors-owner Capri Holdings Ltd (CPRI.N) beat quarterly revenue and profit estimates on Tuesday, helped by unwavering demand for luxury goods from higher-income consumers who remain largely unaffected by decades-high inflation.
Shares of the company, which also owns Versace and Jimmy Choo, rose about 3% in premarket trading. They have fallen 21% this year.
Rising prices have had little impact on middle- and high-income households who have been happily spending on designer labels, having built up substantial savings during the pandemic when restrictions made everything from foreign holidays to eating out more difficult.
European rivals LVMH (LVMH.PA) and Gucci-owner Kering (PRTP.PA) have also seen a strong increase in their sales, benefiting from some luxury spending shifting to Europe as U.S. tourists took advantage of a stronger dollar. read more
Capri said total revenue rose 8.5% to $1.36 billion in the first quarter ended July 2, beating analysts' average estimate of $1.29 billion, according to IBES data from Refinitiv.
Excluding items, Capri earned $1.50 per share, topping estimates of a profit of $1.36.
However, Asia revenue for Michael Kors, Capri's biggest brand, fell over 16%, as a new round of lockdowns in China hit demand in the key luxury goods market. Jimmy Choo and Versace also saw declines.
Capri also said its net inventory at the end of the first quarter was up 66% compared to last year, reflecting its initiatives to expedite seasonal product shipments.
