Capri Holdings Ltd, which owns Michael Kors, surpassed quarterly revenue and profit projections on Tuesday, supported by unwavering demand for luxury items from higher-income buyers who have been mostly unscathed by decades of high inflation.

In premarket trade, shares of the business, which also owns Versace and Jimmy Choo, climbed roughly 3 per cent. They are down 21 per cent this year. Rising costs have had little effect on middle- and upper-income households, which have been cheerfully spending on designer labels after amassing significant reserves during the pandemic, when limitations made everything from overseas vacations to eating out more difficult.

European rivals LVMH and Gucci-owner Kering have also seen a significant increase in sales, with some luxury spending migrating to Europe as U.S. tourists took advantage of a higher dollar.

According to IBES data from Refinitiv, Capri’s overall sales increased 8.5 per cent to $1.36 billion in the first quarter ended July 2, topping analysts’ average forecast of $1.29 billion.

Capri earned $1.50 per share after deducting items, outperforming predictions of $1.36.

However, Asia revenue for Capri’s biggest brand, Michael Kors, slumped more than 16 per cent as a new wave of Chinese lockdowns impacted demand in the vital luxury goods sector. Jimmy Choo and Versace also experienced drops.

Capri also reported that its net inventory at the end of the first quarter was up 66 per cent year on year, owing to attempts to accelerate seasonal product shipments.

(Adapted from Nasdaq.com)