Capri Holdings Limited

What they do

Capri designs, markets, and sells luxury accessories, footwear, and apparel through two reportable segments: Michael Kors (about 83% of fiscal 2026 revenue) and Jimmy Choo (about 17%). Products are sold via company-operated retail stores (673 Michael Kors and 211 Jimmy Choo stores including concessions), e-commerce sites, wholesale doors, and licensing arrangements across over 100 countries.

Revenue drivers

• Michael Kors — The largest segment, contributing approximately 83% of fiscal 2026 total revenue, with three collections: Michael Kors Collection, MICHAEL Michael Kors, and Michael Kors Mens.
• Jimmy Choo — The second segment, contributing approximately 17% of fiscal 2026 total revenue, anchored by women's luxury footwear and complemented by accessories and men's products; fragrance and eyewear are licensed.
• Wholesale and licensing — Revenue is generated through wholesale doors (department and specialty stores) and product/geographic licensing agreements, in addition to direct retail and e-commerce.

Recent performance

For the first quarter of fiscal 2027 (ended June 27, 2026), total revenue was $769 million, down 3.5% reported and 4.1% constant currency. Gross margin improved 200 basis points to 65.0%, and operating margin rose to 2.2% (adjusted 3.6%). Net income was $69 million ($0.60 diluted EPS), up from $56 million ($0.47) a year earlier. Operating cash flow was $73 million, and free cash flow was $48 million. Net inventory fell 20% to $624 million, and net debt declined to $224 million from $1.5 billion a year earlier.

Strategy

Management is focused on building a stronger, more profitable business through enhanced brand storytelling and product innovation at both Michael Kors and Jimmy Choo. They are reducing operating expenses to maintain fiscal 2027 EPS guidance despite lower revenue expectations. The sale of Versace to Prada (completed December 2, 2025) simplified the portfolio. The company is also recovering approximately $65 million in IEEPA tariffs, having received $49 million as of July 31, 2026.

Risks

• Macroeconomic and consumer spending — Inflation, geopolitical instability (including Middle East conflicts), and reduced consumer confidence can depress demand for discretionary luxury goods, affecting revenue and margins.
• Tariffs and trade policy — All products sold in the U.S. are manufactured outside the U.S., so changes in tariffs and import regulations impact product costs and operating income; refund process for IEEPA tariffs involves timing and policy risks.
• Supply chain and input costs — Volatility in raw material prices, labor, fuel, freight, and shipping disruptions (e.g., Red Sea corridor) can increase costs and pressure gross margins.
• Michael Kors headwinds — Management cites lower-than-anticipated inventory levels in the second quarter, softer EMEA trends, and currency headwinds affecting the brand's revenue outlook.

Outlook

Management expects fiscal 2027 revenue of approximately $3.4 billion, down from prior expectations, due to Michael Kors headwinds and currency assumptions. They are cutting operating expenses to hold fiscal 2027 EPS guidance at about $2.15, representing 40% growth over the prior year. Jimmy Choo is expected to continue growing and return to profitability.