Shares for Capri Holdings were down more than 25% on Wednesday morning after the company posted disappointing results in the third quarter, missed earnings expectations and cut its annual profit forecast.

The company, which owns Michael Kors, Jimmy Choo and Versace, reported total revenue in the third quarter of $1.51 billion, a decline of 6% from the same time last year. Net income in the period was $225 million, down from $322 million in the prior year.

Revenue fell across the company’s luxury brands this quarter. 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.

On the company’s earnings call on Wednesday, John D. Idol, chairman and CEO of Capri Holdings, said that Capri’s performance in the third quarter was “more challenging than anticipated” and is “disappointed” with the results.

Idol added that the company’s performance was largely affected by disappointing wholesale performance, mainly in North America, which resulted in “expense deleverage and a lower operating margin.”

“The wholesale business for us was a profitable business and does not have a lot of fixed costs associated with it,” Idol said. “So, we’ll have to make some adjustments inside of our own operations, and we’re hard at work at that right now.”

As such, Idol told analysts on the call that the company is planning for the wholesale business to be down “quite significantly” in the fourth quarter and into the first quarter of next year.

Another pain point for Capri is the price increases it has taken at the Michael Kors brand. Prices are up, on average, close to 25% since the company started its price increases in 2019, Idol said. These increases have not settled well with Michael Kors’ customers lately as more of its demographic cut back spending due to inflation and recession fears in the quarter.

“I do think that the consumer was more cautious during the holiday season,” the CEO admitted. “We saw strong performance in our own stores through Black Friday. [But] we did not see the same rate in the North American wholesale channel, which has not kept up the pace of growth throughout the year.”

Despite the consumer worries, Idol said Capri will continue to elevate the Michael Kors brand and product, which he said is the “right strategy for the brand.”

As for what’s doing well in footwear, Idol mentioned that Versace continues to “gain authority” as a women’s luxury footwear brand. The company continues to build out its core offerings and has recently launched the Pinpoint collection, a new range of statement pumps characterized by a curved metal stiletto heel. Men’s and women’s sneakers also performed well, driven by our Trigreca, Greca and Odessa styles.

At Jimmy Choo, women’s footwear sales grew, driven by dress footwear styles. Sneakers also performed well with positive consumer reaction to its new Diamond Maxi. And more Kors, the company said it continues to believe it can “significantly expand” Michael Kors footwear to drive incremental revenue. Footwear sales in the brand’s retail channel increased low double digits as it delivered new fashion styles featuring hardware branding elements and signature detailing.

Looking ahead to the fourth quarter, Idol added that the company expects continued momentum in its own retail channel, driven by each of its brands strategic initiatives. However, in the wholesale channel, Capri now anticipate an even greater sequential decline relative to the third quarter. As such, the company is further reducing shipments into this channel.

“We believe in the strength of our three luxury houses,” Idol said. “We believe that we have a very good plan for fiscal year ’24 on a go-forward basis. That will continue to embrace and support the strength of each of these three phenomenal brands, and we believe that we will return to the type of growth that we expect in the future.”