Dive Brief:
- Capri Holdings reported first quarter fiscal 2026 revenue of $797 million, a 6% decrease year over year, according to a press release on Wednesday. The company’s gross profit was $502 million, compared to $535 million during the same period last year.
- Michael Kors, the company’s largest brand, saw revenue fall about 6% year over year to $635 million. Jimmy Choo’s revenue was $162 million, a 6.4% drop year over year.
- Capri didn’t include Versace results in its earnings statement, as the brand is expected to be sold to the Prada Group later this year, and its results were marked as discontinued operations.
Dive Insight:
While Capri’s Q1 earnings still include declines at each brand, the decreases aren’t as steep as its results over the last few quarters. In Q4, total revenue declined 15.4%, and in Q3, revenue fell 11.6%.
Wednesday’s results were ahead of the company’s expectations. Capri initially projected revenue of $765 million to $780 million.
“This performance demonstrates the progress we are making as we execute against our strategic initiatives to energize our fashion luxury houses,” John Idol, chairman and CEO, said in the release. “While still early, we are beginning to see signs that our strategies are working.”
Capri expects to return to revenue growth by its 2027 fiscal year, Idol said, and the company is “on track” to stabilize the business this year.
“Both Michael Kors and Jimmy Choo are still in turnaround mode, and it will take some time before they both get healthy,” David Swartz, senior equity analyst at Morningstar Research Services, said in an email. “Michael Kors remains too exposed to the weak department store channel, but Capri is making progress in reducing that exposure.”
In 2024, Capri restructured its executive suite to make Idol the CEO of Michael Kors brand, which the company said at the time was part of its “reorganization plans and expense reduction initiatives.”
Michael Kors will be the main focus of Capri’s turnaround efforts since it generates most of the company’s profit, Swartz added.
Meanwhile, “John Idol said that Jimmy Choo is not for sale, so he must have some confidence that results will improve,” Swartz said.
Next quarter, Capri expects its revenue to be between $815 million and $835 million. This would represent about a 22% to 24% decline from Capri’s $1.08 billion in last year’s Q2.
For the 2026 fiscal year, Capri expects total revenue to be between $3.375 billion and $3.45 billion. It expects Michael Kors’ revenue to be about $2.8 billion.
The company said these projections include the anticipated tariff impact on the regions it sources from, including the EU, Cambodia, Indonesia, Bangladesh, Vietnam, India and China.
