Michael Kors owner Capri Holdings estimated a stunning 70 per cent drop in first-quarter revenue as the COVID-19 pandemic hammered demand for its luxury handbags and dresses. The company also forecast a return to profits in the second half of fiscal 2021, which started in April, helping send its shares up over 3 per cent.

Capri’s sales at its reopened stores hit 50 per cent to 75 per cent of prior year levels with stronger trends in China, but shipments to department stores had plunged and would result in “significant” losses in the first quarter.

According to IBES data from Refinitiv, analysts had forecast a 46.7 per cent fall in the company’s revenue for the first quarter ended June. However, according to its fourth-quarter results, Capri’s total revenue fell 11.3 per cent to $1.19 billion in the three months ended March 28, slightly above the average analyst estimate of $1.12 billion. The company reported a fourth-quarter net loss attributable to Capri of $551 million, compared to a profit of $19 million a year earlier.

On an adjusted basis, the company earned 11 cents per share, missing estimates of 15 cents per share.