Michael Kors-owner Capri Holdings Ltd lowered its annual sales forecast on Wednesday, blaming a slow demand recovery in the key Chinese market due to persistent Covid-19 curbs and uncertainty about the global economy.

Luxury goods companies have managed to pass on higher costs to affluent shoppers but China remains a sore spot as Beijing’s “dynamic zero-Covid” policy hampers the return of consumers to high-fashion stores.

Covid disruptions in China have also weighed heavily on other brands such as Kering’s Gucci, Canada Goose Holdings and L’Oréal.

Capri forecast fiscal 2023 revenue of $5.7 billion, compared with its prior estimate of about $5.85 billion.

Total revenue rose 8.6 percent to $1.41 billion in the second quarter ending Oct. 1, slightly above analysts’ average estimate of $1.40 billion, according to IBES data from Refinitiv.

By Uday Sampath; Editor: Vinay Dwivedi

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