UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 05, 2020

			

CAPRI HOLDINGS LTD	
(Exact name of Registrant as Specified in its Charter)

001-35368
(Commission File Number)

British Virgin Islands	 	N/A	
(State or other jurisdiction
of incorporation)	 	(I.R.S. Employer
Identification No.)	
33 Kingsway
London, United Kingdom
WC2B 6UF
(Address of Principal Executive Offices)
44 207 632 8600
(Registrant’s telephone number, including area code)

			
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:
									
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered	
Ordinary Shares, no par value	CPRI	New York Stock Exchange	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
						
Emerging growth company	☐	

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐	

			

						
ITEM 2.02	RESULTS OF OPERATIONS AND FINANCIAL CONDITION.	

On August 5, 2020, Capri Holdings Limited issued a press release containing its unaudited financial results for its first fiscal quarter ended June 27, 2020. A copy of the press release is attached hereto as Exhibit 99.1.

ITEM 9.01	FINANCIAL STATEMENTS AND EXHIBITS.	
(d) Exhibits.

Exhibit
No.	  	 	
99.1	  	Capri Holdings Limited Press Release, dated August 5, 2020.	
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)	

Exhibit 99.1 is furnished to comply with Item 2.02 and Item 9.01 of Form 8-K. Exhibit 99.1 is not to be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall Exhibit 99.1 be deemed incorporated by reference in any filing under the Securities Act of 1933 (except as shall be expressly set forth by specific reference in such filing).

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

												
			CAPRI HOLDINGS LIMITED
	
Date: August 5, 2020				
		By:	/s/ Thomas J. Edwards, Jr.	
		Name: 	Thomas J. Edwards, Jr.	
		Title:	Executive Vice President, Chief Financial Officer and Chief Operating Officer	

				

Exhibit 99.1
Capri Holdings Limited Announces First Quarter Fiscal 2021 Results

London — August 5, 2020 — Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results for the first quarter of fiscal 2021 ended June 27, 2020.
First Quarter Fiscal 2021 Highlights
•First quarter revenue decline of 66.5%, better than the company's initial expectation
•First quarter adjusted gross margin expansion of 480 basis points versus prior year
•First quarter adjusted loss per share of $1.04
•Ended the first quarter with approximately $1.1 billion of liquidity

John D. Idol, the Company’s Chairman and Chief Executive Officer, said, "The COVID-19 pandemic continues to profoundly impact the entire world. My thoughts and prayers go out to all those who have been affected by the virus and to everyone on the front lines who are tirelessly helping combat this pandemic. At Capri Holdings, we are prioritizing the health and safety of our employees, customers and communities as our stores continue to reopen around the globe. I want to thank our teams around the world for the hard work and dedication they demonstrate every day to support each other and their communities during this unprecedented time."

Mr. Idol continued, "Looking at our progress in the fiscal first quarter, we were encouraged by trends across all three of our luxury houses, with sales and margin performance ahead of our initial expectations. We were particularly pleased with the strong growth of our eCommerce business, as well the sequential improvement in overall revenue trends through the first quarter and into July."

Mr. Idol concluded, "During these unprecedented times, we plan to continue to execute on our strategic growth initiatives and remain confident in the long-term opportunities for each of our unique global luxury houses. Capri Holdings has a portfolio of three iconic, founder-led fashion luxury brands that have enduring value and a long history of successfully navigating challenging periods. We will continue to carefully guide our business through the current retail environment, while positioning the company to resume its growth trajectory in fiscal 2022."

First Quarter Fiscal 2021 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. Due to the current and ongoing impact of the COVID-19 pandemic, the company will not be providing comparable store sales results. The company believes the most comprehensive measure of performance in this environment is total revenues compared to the same period in the prior year.
Overview of Capri Holdings First Quarter Fiscal 2021 Results:
•Total revenue of $451 million decreased 66.5% compared to last year. On a constant currency basis, total revenue decreased 66.2%.
•Gross profit was $302 million and gross margin was 67.0%, compared to $834 million and 62.0% in the prior year. Adjusted gross profit was $303 million and adjusted gross margin was 67.2%, compared to $840 million and 62.4% in the prior year.
•Loss from operations was $162 million and operating margin was (35.9)% compared to income of $64 million and operating margin of 4.8% in the prior year. Adjusted loss from operations was $147 million and operating margin was (32.6)%, compared to operating income of $190 million and 14.1% in the prior year.
•Net loss was $180 million, or $(1.21) per diluted share compared to net income of $45 million, or $0.30 per diluted share in the prior year. Adjusted net loss was $156 million, or $(1.04) per diluted share, compared to income of $145 million or $0.95 per diluted share.
•Net inventory at June 27, 2020 was $948 million, a 7% decrease compared to the prior year.
Versace First Quarter Fiscal 2021 Results:
•Versace revenue of $93 million decreased 55.1% compared to the prior year. On a constant currency basis, total revenue decreased 54.1%.
•Versace operating loss was $41 million and operating margin was (44.1)% compared to an operating loss of $3 million and operating margin of (1.4)% in the prior year. Last year, adjusted operating income was $3 million and adjusted operating margin was 1.4%.
Jimmy Choo First Quarter Fiscal 2021 Results:
•Jimmy Choo revenue of $51 million decreased 67.7% compared to the prior year on a reported and constant currency basis.
•Jimmy Choo operating loss was $29 million and operating margin was (56.9)%, compared to operating income of $11 million and operating margin of 7.0% in the prior year.
Michael Kors First Quarter Fiscal 2021 Results:
•Michael Kors revenue of $307 million decreased 68.7% compared to the prior year. On a constant currency basis, total revenue decreased 68.5%.
•Michael Kors operating loss was $48 million and operating margin was (15.6)%, compared to operating income of $201 million and operating margin of 20.5% in the prior year.
Fiscal Year 2021 Outlook
Due to the lack of visibility surrounding the pandemic, macroeconomic fundamentals and tourism, the impacts on our financial and operating results cannot reasonably be estimated at this time. Therefore, the company is not providing earnings guidance for its fiscal year 2021.

Conference Call Information
A conference call to discuss first quarter fiscal 2021 results is scheduled for today, August 5, 2020 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 August 12, 2020. 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 10010472. A replay of the webcast will also be available within two hours of the conclusion of the call.
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 that exclude certain costs associated with COVID-19 related charges, long-lived asset impairments, ERP implementation costs, Capri transformation costs, restructuring and other charges. 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 these 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 herein, may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. 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 effect of the COVID-19 pandemic and its potential material and significant impact on the Company’s future financial and operational results if retail stores are forced to close again and the pandemic is prolonged, including that our estimates could materially differ if the severity of the COVID-19 situation worsens, the length and severity of such outbreak across the globe and the pace of recovery following the COVID-19 pandemic, levels of cash flow and future availability of credit, compliance with restrictive covenants under the Company’s credit agreement, 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); 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 epidemics and pandemics, 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 Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2020 (File No. 001-35368). Any forward-looking statement in this press release speaks only as of the date made and 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.
CONTACTS:
Investor Relations:
Jennifer Davis
(201) 514-8234
Jennifer.Davis@CapriHoldings.com
Media:
Dinesh Kandiah
(917) 934-2427
Press@CapriHoldings.com

SCHEDULE 1
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)

 		Three Months Ended	
		June 27,
2020		June 29,
2019	
Total revenue		$	451 	 		$	1,346 	 	
Cost of goods sold		149 	 		512 	 	
Gross profit		302 	 		834 	 	
Total operating expenses		464 	 		770 	 	
(Loss) income from operations		(162)	 		64 	 	
Other income, net		(1)	 		(2)	 	
Interest expense, net		17 	 		13 	 	
Foreign currency (gain) loss		(3)	 		2 	 	
(Loss) income before provision for income taxes		(175)	 		51 	 	
Provision for income taxes		5 	 		6 	 	

Net (loss) income attributable to Capri		$	(180)	 		$	45 	 	
Weighted average ordinary shares outstanding:					
Basic		149,556,310 	 		151,049,572 	 	
Diluted		149,556,310 	 		152,334,153 	 	
Net (loss) income per ordinary share:					
Basic		$	(1.21)	 		$	0.30 	 	
Diluted		$	(1.21)	 		$	0.30 	 	

SCHEDULE 2
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
																					
		June 27,
2020		March 28,
2020		June 29,
2019	
Assets							
Current assets							
Cash and cash equivalents		$	207 	 		$	592 	 		$	160 	 	
Receivables, net		183 	 		308 	 		310 	 	
Inventories, net		948 	 		827 	 		1,016 	 	
Prepaid expenses and other current assets		151 	 		167 	 		337 	 	
Total current assets		1,489 	 		1,894 	 		1,823 	 	
Property and equipment, net		541 	 		561 	 		608 	 	
Operating lease right-of-use assets		1,641 	 		1,625 	 		1,718 	 	
Intangible assets, net		1,977 	 		1,986 	 		2,250 	 	
Goodwill		1,490 	 		1,488 	 		1,652 	 	
Deferred tax assets		226 	 		225 	 		111 	 	
Other assets		169 	 		167 	 		221 	 	
Total assets		$	7,533 	 		$	7,946 	 		$	8,383 	 	
Liabilities and Shareholders’ Equity							
Current liabilities							
Accounts payable		$	596 	 		$	428 	 		$	355 	 	
Accrued payroll and payroll related expenses		94 	 		93 	 		96 	 	
Accrued income taxes		34 	 		42 	 		36 	 	
Current operating lease liabilities		431 	 		430 	 		408 	 	
Short-term debt		191 	 		167 	 		514 	 	
Accrued expenses and other current liabilities		243 	 		241 	 		372 	 	
Total current liabilities		1,589 	 		1,401 	 		1,781 	 	
Long-term operating lease liabilities		1,751 	 		1,758 	 		1,754 	 	
Deferred tax liabilities		465 	 		465 	 		437 	 	
Long-term debt		1,577 	 		2,012 	 		1,917 	 	
Other long-term liabilities		144 	 		142 	 		210 	 	
Total liabilities		5,526 	 		5,778 	 		6,099 	 	
Commitments and contingencies							
Redeemable noncontrolling interest		— 	 		— 	 		4 	 	
Shareholders’ equity							
Ordinary shares, no par value; 650,000,000 shares authorized; 218,272,709 shares issued and 150,340,192 outstanding at June 27, 2020; 217,320,010 shares issued and 149,425,612 outstanding at March 28, 2020 and 216,742,279 shares issued and 151,565,342 outstanding at June 29, 2019		— 	 		— 	 		— 	 	
Treasury shares, at cost 67,932,517 shares at June 27, 2020, 67,894,398 shares at March 28, 2020 and 65,176,937 shares at June 29, 2019		(3,326)	 		(3,325)	 		(3,225)	 	
Additional paid-in capital		1,109 	 		1,085 	 		1,040 	 	
Accumulated other comprehensive income (loss)		71 	 		75 	 		(93)	 	
Retained earnings		4,152 	 		4,332 	 		4,555 	 	
Total shareholders’ equity of Capri		2,006 	 		2,167 	 		2,277 	 	
Noncontrolling interest		1 	 		1 	 		3 	 	
Total shareholders’ equity		2,007 	 		2,168 	 		2,280 	 	
Total liabilities and shareholders’ equity		$	7,533 	 		$	7,946 	 		$	8,383 	 	

SCHEDULE 3
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT DATA
($ in millions)
(Unaudited)

 		Three Months Ended	
		June 27,
2020		June 29,
2019	
Revenue by Segment and Region:					
Versace		The Americas		$	15 	 		$	44 	 	
		EMEA		27 	 		92 	 	
		Asia		51 	 		71 	 	
Versace Revenue		93 	 		207 	 	
							
Jimmy Choo		The Americas		6 	 		30 	 	
		EMEA		16 	 		79 	 	
		Asia		29 	 		49 	 	
Jimmy Choo Revenue		51 	 		158 	 	
							
Michael Kors		The Americas		156 	 		655 	 	
		EMEA		79 	 		189 	 	
		Asia		72 	 		137 	 	
Michael Kors Revenue		307 	 		981 	 	
					
Total Revenue		$	451 	 		$	1,346 	 	
					
(Loss) Income from Operations:					
Versace				$	(41)	 		$	(3)	 	
Jimmy Choo				(29)	 		11 	 	
Michael Kors				(48)	 		201 	 	
Total segment income from operations		(118)	 		209 	 	
Less: Corporate expenses		(31)	 		(33)	 	
Restructuring and other charges		(8)	 		(15)	 	
Impairment of assets		— 	 		(97)	 	
COVID-19 related charges	(5)	 		— 	 	
Total (Loss) Income from Operations		$	(162)	 		$	64 	 	
							
Operating Margin:							
Versace				(44.1)	%		(1.4)	%	
Jimmy Choo				(56.9)	%		7.0 	%	
Michael Kors				(15.6)	%		20.5 	%	
Capri Operating Margin				(35.9)	%		4.8 	%	

SCHEDULE 4
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
SUPPLEMENTAL RETAIL STORE INFORMATION
(Unaudited)

 		 		As of	
Retail Store Information:		June 27,
2020		June 29,
2019	
Versace		204 	 		196 	 	
Jimmy Choo		228 	 		215 	 	
Michael Kors		822 	 		853 	 	
Total number of retail stores				1,254 	 		1,264 	 	

SCHEDULE 5
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
CONSTANT CURRENCY DATA
(In millions)
(Unaudited)

 		Three Months Ended		% Change	
		June 27,
2020		June 29,
2019		As
Reported		Constant
Currency	
Total revenue:									
Versace		93 	 		$	207 	 		(55.1)	%		(54.1)	%	
Jimmy Choo		51 	 		158 	 		(67.7)	%		(67.7)	%	
Michael Kors		307 	 		981 	 		(68.7)	%		(68.5)	%	
Total revenue		$	451 	 		$	1,346 	 		(66.5)	%		(66.2)	%	

	

	

	

SCHEDULE 6

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except share and per share data)
(Unaudited)

		Three Months Ended June 27, 2020	
		As
Reported		Restructuring and Other Charges (1)		COVID-19 Related Charges		ERP Implementation		As
Adjusted	
Gross profit		$	302 	 		$	— 	 		$	1 	 		$	— 	 		$	303 	 	

Operating expenses		$	464 	 		$	(8)	 		$	(4)	 		$	(2)	 		$	450 	 	

Total loss from operations		$	(162)	 		$	8 	 		$	5 	 		$	2 	 		$	(147)	 	
											
Loss before provision for income taxes		$	(175)	 		$	8 	 		$	5 	 		$	2 	 		$	(160)	 	
Provision for (benefit from) income taxes		$	5 	 		$	(5)	 		$	(3)	 		$	(1)	 		$	(4)	 	
Net loss attributable to Capri		$	(180)	 		$	13 	 		$	8 	 		$	3 	 		$	(156)	 	
	
Diluted net loss per ordinary share - Capri		$	(1.21)	 		$	0.09 	 		$	0.06 	 		$	0.02 	 		$	(1.04)	 	
______________________
(1)Includes store closure costs which have been incorporated into the Capri Retail Store Optimization Program and other costs recorded in connection with the acquisitions of Gianni Versace S.r.l. and Jimmy Choo Group Limited.

SCHEDULE 7

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except share and per share data)
(Unaudited)

		Three Months Ended June 29, 2019	
		As Reported		Impairment Charges		Restructuring and Other Charges (1)		Inventory Step-up Adjustment		ERP Implementation		As Adjusted	
Gross profit		$	834 	 		$	— 	 		$	— 	 		$	6 	 		$	— 	 		$	840 	 	
													
Operating expenses		$	770 	 		$	(97)	 		$	(15)	 		$	— 	 		$	(8)	 		$	650 	 	
													
Versace operating (loss) income		$	(3)	 		$	— 	 		$	— 	 		$	6 	 		$	— 	 		$	3 	 	
Total income from operations		$	64 	 		$	97 	 		$	15 	 		$	6 	 		$	8 	 		$	190 	 	
													
Income before provision for income taxes		$	51 	 		$	97 	 		$	15 	 		$	6 	 		$	8 	 		$	177 	 	
Provision for income taxes		$	6 	 		$	19 	 		$	3 	 		$	2 	 		$	2 	 		$	32 	 	
Net income attributable to Capri		$	45 	 		$	78 	 		$	12 	 		$	4 	 		$	6 	 		$	145 	 	
	
Diluted net income per ordinary share - Capri		$	0.30 	 		$	0.51 	 		$	0.08 	 		$	0.02 	 		$	0.04 	 		$	0.95 	 	
______________________
(1)Includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan and other restructuring initiatives, and other costs recorded in connection with the acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited.