Capri Holdings Limited Reports Second Quarter Fiscal 2027 Results

Revenue, Operating Income and Earnings Per Share Exceed Expectations Company Increases Full Year OutlookLONDON--(BUSINESS WIRE)--Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results for the second quarter of Fiscal 2027 ended September 26, 2026. Second Quarter Fiscal 2027 Highlights from Continuing Operations Revenue decreased 5.5% on a reported basis and 4.9% in constant currency Operating margin was 1.2%; adjusted operating margin was 3.8% Earnings per share were $0.25; adjusted earnings per share were $0.42 John D. Idol, the Company's Chairman and Chief Executive Officer, said, “We are encouraged by the momentum building at both Michael Kors and Jimmy Choo. Throughout the second quarter, trends improved sequentially each month across both of our luxury houses, reflecting the actions we have taken to sharpen our product assortments, elevate brand desirability and strengthen consumer engagement. We are pleased with the progress we are seeing and believe these initiatives are beginning to position our brands for sustainable growth.” Mr. Idol continued, “Looking ahead, we continue to expect total company revenue to return to growth in the second half of fiscal 2027, supported by exciting new collections, increased marketing investments and our focus on elevating the consumer experience. As these efforts continue to gain traction, we remain confident in our ability to deliver sustainable growth and create meaningful value for shareholders over time.” Second Quarter Fiscal 2027 Results Financial Results and Non-GAAP Reconciliation The Company's results are reported in this press release in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and on an adjusted, non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information is provided at the end of this press release. As previously disclosed, on April 10, 2025, the Company and Prada S.p.A. (“Prada”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) whereby Prada agreed to acquire certain subsidiaries of the Company which operate the Company’s Versace business. As a result, the Company classified the results of operations and cash flows of its Versace business as discontinued operations in its consolidated financial statements for all periods presented. The related assets and liabilities associated with the discontinued operations were classified as held for sale in the consolidated balance sheets as of September 27, 2025. On December 2, 2025, the Company completed the sale of its Versace business. Unless otherwise noted, the discussion below, including analysis of financial condition and results of operations, relates only to continuing operations. Overview of Capri Holdings Second Quarter Fiscal 2027 Results Total revenue of $809 million decreased 5.5% compared to last year. On a constant currency basis, total revenue decreased 4.9%. Approximately $20 million of revenue was attributable to earlier than anticipated timing of wholesale shipments. Gross profit was $512 million and gross margin was 63.3%, compared to $522 million and 61.0% in the prior year. The 230 basis point increase in gross margin was primarily driven by higher full-price sell-throughs, brand mix and lower tariff rates relative to the second quarter of fiscal 2026. Income from operations was $10 million and operating margin was 1.2%, compared to loss from operations of $12 million and operating margin of (1.4)% in the prior year. Adjusted income from operations was $31 million and adjusted operating margin was 3.8%, compared to $20 million and 2.3% in the prior year. Net income was $27 million, or $0.25 per diluted share, compared to net loss of $34 million, or $(0.28) per diluted share, in the prior year. Adjusted net income was $45 million, or $0.42 per diluted share, compared to adjusted net loss of $4 million, or $(0.03) per diluted share, in the prior year. Net inventory as of September 26, 2026 was $712 million, a 7% decrease compared to the prior year. Cash flow provided by operating activities for the second quarter was $51 million, while capital expenditures were $15 million, resulting in free cash flow of $36 million. Cash and cash equivalents totaled $125 million, and total borrowings outstanding were $461 million, resulting in net debt of $336 million as of September 26, 2026 versus $1.6 billion as of September 27, 2025. Michael Kors Second Quarter Fiscal 2027 Results Michael Kors revenue of $663 million decreased 8.6% compared to last year. On a constant currency basis, Michael Kors revenue declined 8.0%. Approximately $15 million of revenue was attributable to earlier than anticipated timing of wholesale shipments. Michael Kors gross profit was $408 million and gross margin was 61.5%, compared to $430 million and 59.3% in the prior year. The 220 basis point increase in gross margin was primarily driven by higher full-price sell-throughs and lower tariff rates relative to the second quarter of fiscal 2026. Michael Kors operating income was $68 million and operating margin was 10.3%, compared to $73 million and 10.1% in the prior year. The 20 basis point increase in operating margin was primarily due to higher gross margin, partially offset by expense deleverage on lower revenue. Jimmy Choo Second Quarter Fiscal 2027 Results Jimmy Choo revenue of $146 million increased 11.5% compared to last year. On a constant currency basis, Jimmy Choo revenue increased 12.2%. Approximately $5 million of revenue was attributable to earlier than anticipated timing of wholesale shipments. Jimmy Choo gross profit was $104 million and gross margin was 71.2%, compared to $92 million and 70.2% in the prior year. The 100 basis point increase in gross margin was primarily driven by higher full-price sell-throughs. Jimmy Choo operating income was $2 million and operating margin was 1.4%, compared to an operating loss of $9 million and operating margin of (6.9)% in the prior year. The 830 basis point increase in operating margin was primarily driven by expense leverage on higher revenue. Share Repurchase Program During the fiscal second quarter, the Company spent $150 million to repurchase approximately 10.3 million ordinary shares in open market transactions at an average cost of approximately $14.56 per share. As of September 26, 2026, the remaining availability under the Company's share repurchase program was $721 million. Outlook The following guidance is provided on an adjusted, non-GAAP basis. Guidance continues to assume an incremental 10% tariff rate on imports into the United States through July 24, 2026 and 10% to 12.5% thereafter. Financial results could differ materially from the current outlook due to a number of external factors which are not reflected in our guidance, including changes in global macroeconomic conditions, incremental tariff rates in excess of our assumptions, greater than anticipated inflationary pressures or weakening consumer confidence, and further considerable fluctuations in foreign currency exchange rates. Fiscal Year 2027 Outlook For Capri Holdings, the Company now expects the following: Total revenue of approximately $3.42 billion Operating income of approximately $175 million Net interest and other income of approximately $100 million Effective tax rate in the low-teens percent range Weighted average diluted shares outstanding of approximately 108 million Diluted earnings per share of approximately $2.20 For Michael Kors, the Company expects the following: Total revenue of approximately $2.77 billion Operating margin in the low-double-digit percent range For Jimmy Choo, the Company expects the following: Total revenue of approximately $650 million Operating margin in the low-single-digit percent range Third Quarter Fiscal 2027 Outlook For Capri Holdings, the Company expects the following: Total revenue of approximately $1.005 billion. This outlook includes the impact of $20 million of wholesale shipments that shifted out of the third quarter into the second quarter. Operating income of approximately $90 million Net interest and other income of approximately $25 million Effective tax rate in the mid-teens percent range Weighted average diluted shares outstanding of approximately 103 million Diluted earnings per share of approximately $0.95 For Michael Kors, the Company expects the following: Total revenue of approximately $830 million, reflecting the impact of $15 million of wholesale shipments that shifted out of the third quarter into the second quarter. Operating margin in the mid-teens percent range For Jimmy Choo, the Company expects the following: Total revenue of approximately $175 million, reflecting the impact of $5 million of wholesale shipments that shifted out of the third quarter into the second quarter. Operating margin in the low-to-mid-single-digit percent range The Company is unable to provide a reconciliation of the non-GAAP financial outlook to the corresponding GAAP measures presented in this press release and on the Company’s conference call without unreasonable effort due to the challenge in quantifying various significant items, including, but not limited to, foreign currency fluctuations, taxes, increased tariffs, and any future restructuring and other charges and expenses. Conference Call Information A conference call to discuss second quarter fiscal 2027 results is scheduled for today, October 30, 2026 at 10:00 a.m. ET. A live webcast of the conference call will be available on the Company's website, www.capriholdings.com. In addition, a replay will be available shortly after the conclusion of the call and remain available until November 6, 2026. To access the telephone replay, listeners should dial 1 (844) 512-2921 or 1 (412) 317-6671 for international callers. The access code for the replay is 13758774. A replay of the webcast will also be available within two hours of the conclusion of the call. Use of Non-GAAP Financial Measures Constant currency effects are non-GAAP financial measures, which are provided to supplement our reported operating results to facilitate comparisons of our operating results and trends in our business, excluding the effects of foreign currency rate fluctuations. Because we are a global company, foreign currency exchange rates may have a significant effect on our reported results. The Company believes presenting metrics on a constant currency basis will help investors to understand the effect of significant year-over-year foreign currency exchange rate fluctuations and provide a framework to assess how the business is performing and expected to perform excluding these effects. We calculate constant currency measures and the related foreign currency impacts by translating the current year's reported amounts into comparable amounts using prior year's foreign exchange rates for each currency. All constant currency performance measures discussed in this press release should be considered a supplement to and not in lieu of our operating performance measures calculated in accordance with U.S. GAAP. The Company also presents free cash flow, which is a non-GAAP measure and is calculated by taking net cash provided by operating activities less capital expenditures for the period. The Company believes that free cash flow is an important liquidity measure of cash that is available after giving effect to our capital and strategic plans, and that it is useful to investors because it measures the Company’s ability to generate cash. Additionally, this earnings release includes certain non-GAAP financial measures that exclude certain one-time, non-recurring costs associated with impairment charges, Capri transformation initiatives, certain store renovation plan expenses, transaction related costs and restructuring and other activities. The Company uses non-GAAP financial measures, among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. The Company believes that excluding these items, which are not comparable from period to period, helps investors compare operating and financial performance in a manner consistent with management's evaluation of ongoing business performance. While the Company considers the non-GAAP measures to be useful supplemental measures in analyzing its results, they are not intended to replace, nor act as a substitute for, any amounts presented in its consolidated financial statements prepared in conformity with U.S. GAAP and may be different from non-GAAP measures reported by other companies. About Capri Holdings Limited Capri Holdings is a global fashion luxury group consisting of iconic brands Michael Kors and Jimmy Choo. Our commitment to creativity, fashion, style and craftsmanship is at the heart of each of our luxury brands. We have built our reputation on designing exceptional, innovative products that cover the full spectrum of fashion luxury categories. Our strength lies in the unique DNA and heritage of each of our brands, the diversity and passion of our people and our dedication to the clients and communities we serve. Our designs inspire consumers to embrace the feeling of luxury in every moment. Capri Holdings Limited is publicly listed on the New York Stock Exchange under the ticker CPRI. Forward-Looking StatementsRead the full story here

Capri Holdings Limited Reports Second Quarter Fiscal 2027 Results

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