Capri Holdings Q4 FY26 earnings call CPRI

Management framed FY26 as a deliberate reset of the Michael Kors business — reducing promotional activity, third-party sales and off-price shipments, plus store optimization, which together cut FY26 revenue by over $150 million. These actions pressured near-term revenue (Q4 MK -5.5% reported) but lifted full-price sell-throughs and AURs and are positioned to strengthen the brand for FY27 and beyond. The quality-of-sale headwind is expected to moderate^📎 as FY27 progresses, with roughly $75M of impact concentrated in the first half before the actions lap around October.

Michael Kors full-price comparable store sales turned positive in Q4 and were positive across all regions, with AURs up low double digits on reduced promotions and strong reception to new product and 'modern jet set' storytelling; store traffic improved sequentially. The outlet channel remained the laggard, down mid-single digits, though outlet AURs turned positive after February price increases with no measured drop in conversion. Management expects outlet to return to growth in H2 FY27 as ~75% of outlet product turns over to more trend-right assortments and quality-of-sale actions lap.

Jimmy Choo Q4 revenue rose 5.3% reported (flat constant currency), exceeding expectations, with retail and wholesale both up mid-single digits and Americas up double digits at retail. Growth is led by an expanding accessories business (Bonbon, bar and curve groups) supported by a broadened pricing architecture including bags below $1,500, plus casual footwear (Elisa Ballerina flat, Sunny sneaker). Accessories are in the low-to-mid 20s percent of the business today with a target of 30-40%; owned factories account for ~50% of production, a lever in the planned profit improvement program.

Q4 gross margin expanded 490bps to 64.8%, aided by a refund receivable for the $65M of IEEPA tariffs paid in FY26 following a Supreme Court decision — $40M reduced Q4 COGS ($38M Michael Kors, $2M Jimmy Choo) and $25M was recorded against inventory to flow through COGS in H1 FY27. Excluding new tariffs, Michael Kors gross margin expanded ~150bps on higher AURs and full-price sell-through, while Jimmy Choo's contracted ~90bps on lower initial markups tied to its expanded pricing architecture. FY27 guidance assumes an incremental 10% US import tariff, versus roughly 19% higher tariffs in H2 FY26 stepping down to ~10%.

The completed divestiture of Versace (now reported as discontinued operations) reduced net debt to $222M from approximately $1.4B a year ago, with quarter-end cash of $135M and debt of $357M. The company generated positive free cash flow, ended the quarter with inventory down 17% YoY to $581M, and restarted share repurchases with $79M bought back in Q4 — earlier than planned — leaving $921M of authorization. Capital allocation priorities are reinvestment in the business (store renovations, IT/digital) followed by shareholder returns while maintaining a strong, flexible balance sheet.

Michael Kors leaned into its 'traveling the world in style' jet-set positioning via the Hotel Stories campaign and a fifth-anniversary Collection runway show at Lincoln Center that generated 4.3 billion impressions, helping grow the global consumer database 8% YoY; Jimmy Choo's database grew 7%. An influencer program spanning 400+ ambassadors and expanded social-media presence targets younger consumers, with Gen Z growing fast at Jimmy Choo. The renovation program (~35 MK stores completed, ~100 planned in FY27 plus ~150 department-store doors) is showing encouraging traffic and sales lifts, including a new Jet Set lounge cafe concept debuted at the Beijing China World flagship.