Capri Holdings Ltd, the parent company of prestigious fashion brands Versace, Jimmy Choo, and Michael Kors, has announced better-than-expected results for the first quarter. The company attributes this success to the recovering demand for its brands in China and the significant increase in online shopping.

Following this news, shares of Capri Holdings experienced a 14% rise in early trading. The company revealed that sales of Versace and Jimmy Choo in Mainland China remained stable compared to the previous year. This trend aligns with other luxury goods manufacturers, including LVMH and Kering, who have also reported an upswing in demand in the Chinese market.

However, Capri Holdings also pointed out that revenue from its Hong Kong and Macau markets has remained significantly lower than last year. This can be attributed to the ongoing impact of the Covid-19 pandemic and travel restrictions. Despite these challenges, Chinese consumers continue to be crucial players in global luxury goods sales, and domestic demand in China has been steadily increasing.

Looking ahead, the company warns that sales in Europe and North America are expected to recover at a slower pace. Capri Holdings predicts a 40% decline in total revenue for the second quarter and a 35% decline for the entire year. The absence of tourists in major European cities, where the company generates a significant portion of its sales, has been a major factor contributing to this decline.

In the first quarter, total revenue dropped by 66.5% to $451 million. However, this decline was smaller than initially projected, thanks to a 30% increase in online sales. Capri Holdings reported a loss of $1.04 per share, which was lower than the analysts’ expectations of $1.11 per share.

Despite the challenges faced by the fashion industry due to the pandemic, Capri Holdings remains hopeful about the future. The company has reiterated its previous expectations of returning to earnings and revenue growth in fiscal 2022, starting next year. However, it acknowledges the uncertainties surrounding the ongoing global health crisis and continues to closely monitor the situation.

Overall, Capri Holdings’ first-quarter results showcase the resilience of luxury brands in the face of economic challenges. The notable recovery in China and the surge in online shopping highlight the shifting dynamics of consumer behavior. As the world adapts to the new normal, the fashion industry must continue to innovate and adapt to meet changing consumer needs and preferences.

Useful Links:
– [LVMH Reports Strong Sales Growth in China](https://www.lvmh.com/news-documents/press-releases/?docs=undefined&title=lvmh-moët-hennessy-louis-vuitton-agreement-to-acquire-belmond)
– [Kering Sees Recovery in China Market](https://www.kering.com/en/news/kering-press-releases/kering-press-releases-n1)