Michael Kors owner Capri Holdings Ltd on Wednesday raised its annual profit forecast above Street estimates, shrugging off fears about inventory delays and higher costs, and sending its shares up about 10 percent in premarket trade.

The luxury goods industry has seen a rebound in demand from pandemic lows, which has helped rivals such as French group LVMH post strong quarterly sales growth, but many are now grappling with factory closures in manufacturing hub Vietnam, port congestion and loss of workers.

Capri, like peers Ralph Lauren and PVH Corp, is also battling surging transportation and freight costs, but said the impact was cushioned by strong demand for its products and price increases at its high-margin brands such as Michael Kors and Jimmy Choo.

“The success of these [strategic] initiatives is currently offsetting the Covid-19 related industry headwinds including supply chain delays and increased transportation costs,” Capri chief executive John Idol said.

These efforts helped the Versace parent announce a new share buyback program of $1 billion, and post a 17 percent jump in second quarter revenue to $1.30 billion, above analysts’ estimates of $1.27 billion.

The company forecast fiscal 2022 earnings per share of about $5.30, compared with a prior forecast of $4.50 per share.

Analysts on average expect annual profit per share of about $4.57, according to IBES data from Refinitiv.

Excluding one-time items, the company earned a profit of $1.53 per share in the second quarter, blowing past analysts’ average estimate of a profit of 95 cents per share.

By Aditi Sebastian; Editor: Shinjini Ganguli

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Capri Holdings Raises Annual Revenue Forecast on Luxury Rebound

Michael Kors parent Capri Holdings Ltd raised its annual revenue forecast for the second time this year after beating Wall Street estimates for first quarter revenue, as shoppers splurge on its high-end clothes and bags.