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Capri Holdings Ltd (CPRI) shares were indicated sharply lower Wednesday after the luxury goods brand formerly known as Michael Kors slashed its current quarter outlook thanks to costs linked to its $2 billion acquisition of Versace.

Capri said earnings for the three months ending in March, its fiscal fourth quarter, came in at 63 cents per share, flat from last year but 2 cents ahead of the Street consensus forecast. Group sales, Capri said, rose 13.8% to $1.344 billion and again topped analysts' estimates. 

The group said its 2018 purchase of Versace, however, would trim first quarter earnings by around 15 cents a share as it opens new stores and ramps-up its marketing expense, and issued a fresh forecast of between 85 cents and 90 cents for its fiscal first quarter. Sales of $1.36 billion for the three months ending in June also missed the Refinitiv forecast.

"Looking ahead, Fiscal 2020 will be an investment year for our group, and we believe our initiatives will deliver strong revenue growth for Capri Holdings. Longer term, our three brands position Capri Holdings to accelerate revenue from $6 billion to $8 billion dollars, which will be led by Versace and Jimmy Choo, with Michael Kors remaining a strong foundation for Capri Holdings," said CEO John Idol. "We expect to grow Versace from $900 million to $2 billion dollars in revenue, expand Jimmy Choo from nearly $600 million to $1 billion in revenue, while building Michael Kors from $4.5 billion to $5.0 billion in revenue."

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"Taken together, we believe our three iconic, founder-led fashion brands position Capri Holdings to deliver multiple years of earnings growth." Idol added.

Capri shares were marked 10.13% lower following the earnings to change hands at $35.08 each, a move that would erase all of the stock's year-to-date gains.