What happened

Shares of Capri Holdings (NYSE:CPRI) fell more than 10% on Wednesday after the parent of Michael Kors and other luxury brands provided a fiscal 2020 outlook that fell short of expectations.

So what

In a statement announcing earnings, CEO John Idol called the recently completed fiscal 2019 "transformational," as the company integrated its 2017 acquisition of Jimmy Choo and merged with Versace. The company earned $0.63 per share in its fiscal fourth quarter, $0.02 ahead of forecast, on sales that were up 13% year over year to $1.344 billion and ahead of expectations.

A group of friends out shopping together.

Image source: Getty Images.

Alas, while the acquisitions added to sales, they did not generate outsized profits. Jimmy Choo's revenue climbed 29% year over year, but the brand posted an adjusted operating loss of $16 million. Similarly, Versace contributed $137 million in revenue, but its operating loss on an adjusted basis was $6 million.

The company also provided a tepid outlook for fiscal 2020. Capri sees fiscal first-quarter sales of $1.36 billion, short of the $1.45 billion consensus estimate, and full-year sales of about $6 billion, versus expectations for $6.1 billion.

Now what

If 2019 was a year of transformation, Idol called 2020 "an investment year" for the group. Long term, he believes he can grow Versace revenue to $2 billion from $900 million, and Jimmy Choo to $1 billion from $600 million, providing solid complements to a $5 billion Michael Kors business.

That's a great goal, but investors at least on Wednesday were in no mood to wait for those investments to pay off. With the decline, shares of Capri -- which at one point in April had been up by more than 24% year to date -- fell into the red for the year.