Shares of Michael Kors owner Capri Holdings plunged 20% in early trading Wednesday after the company missed earnings expectations and cut its annual profit forecast.

High-end fashion companies outperformed many other industries last year amid decades-high inflation, but increasing prices have led some consumers to curb spending on luxury goods. Some industry experts expected brands such as Michael Kors, which has a younger and less wealthy customer base, to take a larger hit than higher-priced brands like Hermès.

Here’s how the company did:

• Earnings per share: $1.84 vs. $2.22 expected by analysts, according to Refinitiv.
• Revenue: $1.51 billion vs. $1.53 billion expected by analysts, according to Refinitiv.

The apparel manufacturer reported a 6% drop in revenue from the year-ago period. Capri reported that net income was $225 million, down from $322 million in the year prior.

Revenue fell across the company’s luxury brands: Michael Kors revenue fell 7.2% year over year to $1.1 billion, Jimmy Choo revenue fell 5.6% to $168 million, and Versace revenue fell 0.8% to $249 million.

Each division posted double-digit revenue declines in Asia as the result of slower store traffic following China’s unwinding of its zero-Covid policy.

Capri also reported a 21% increase in net inventory as of Dec. 31, totaling $1.19 billion. The company said it expects additional promotional activity to bring levels down by the end of the current quarter.

“Overall, our performance in the third quarter was more challenging than anticipated,” CEO John Idol said in an earnings release. “We were disappointed with the performance of our global wholesale business in the quarter which resulted in expense deleverage and a lower operating margin.”

Idol said the company has begun efforts to “better align operating expenses with the change in revenue.”

Capri said it now expects full year 2023 sales of $5.56 billion, below analyst expectations of $5.72 billion, according to Refinitiv. The company slashed its full-year earnings per share forecast to $6.10 from a prior forecast of $6.85.

Capri’s fiscal year 2024 forecast came in under estimates, as well: The company expects earnings per share of $6.40 on approximate revenue of $5.8 billion. Analysts polled by Refinitiv had been expecting earnings per share of $7.24 and revenue of $6.03 billion.