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    CPRI
    Earnings call· Jun 2026(Q1 FY27)

    Capri Holdings Q1 FY27 earnings call CPRI

    Aug 5, 2026 Source

    Executive summary

    Capri Holdings Q1 FY27 — Strong Profit Growth Despite Revenue Headwinds

    Capri Holdings exceeded Q1 expectations with strong profit growth and EPS expansion, driven by strategic initiatives at Michael Kors and Jimmy Choo. Despite a revised downward revenue outlook for FY27 due to near-term inventory delays and EMEA softness, disciplined expense management allows the company to maintain its full-year EPS guidance. The focus remains on enhancing brand desirability, product innovation, and quality of sales, with Michael Kors expected to return to growth in the back half of the year and Jimmy Choo continuing its positive momentum.

    Highlights

    5

    • Total company operating income increased approximately 40% YoY.

    • Diluted EPS reached $0.67, up approximately 30% compared to the prior year.

    • Jimmy Choo revenue increased 10.5% YoY, exceeding expectations.

    • Michael Kors gross margin expanded 280 bps, driven by higher full-price sell-throughs and lower tariff rates.

    • Net debt was reduced to $224 million from approximately $1.5 billion last year.

    Concerns

    4

    • Fiscal '27 revenue outlook revised down to approximately $3.4 billion due to Q2 inventory delays, softer EMEA trends, and FX headwinds.

    • Michael Kors Q2 revenue is expected to be reduced by $50 million due to lower-than-anticipated inventory levels.

    • Michael Kors Q2 revenue is expected to be reduced by $15 million due to softer EMEA trends.

    • Michael Kors Q2 revenue is expected to be reduced by $10 million due to foreign currency headwinds.

    Guidance & targets

    26
    CategoryTargetConfidence
    Fiscal 2027 Revenue
    approximately $3.4 billion
    high materiality
    High
    Fiscal 2027 Michael Kors Revenue
    approximately $2.765 billion
    high materiality
    High
    Fiscal 2027 Jimmy Choo Revenue
    approximately $635 million
    medium materiality
    High
    Fiscal 2027 Gross Margin
    approximately 64%
    high materiality
    High
    Fiscal 2027 Operating Expenses
    approximately $2 billion
    medium materiality
    High
    Fiscal 2027 Operating Income
    approximately $170 million
    high materiality
    High
    Fiscal 2027 Michael Kors Operating Margin
    low double-digit range
    medium materiality
    High
    Fiscal 2027 Jimmy Choo Operating Margin
    low single-digit range
    medium materiality
    High
    Fiscal 2027 Net Interest and Other Income
    approximately $100 million
    low materiality
    High
    Fiscal 2027 Effective Tax Rate
    low teens range
    low materiality
    High
    Fiscal 2027 Weighted Average Shares Outstanding
    approximately 110 million
    low materiality
    High
    Fiscal 2027 Diluted EPS
    approximately $2.15
    high materiality
    High
    Q2 FY27 Total Company Revenue
    approximately $780 million
    high materiality
    High
    Q2 FY27 Michael Kors Revenue
    approximately $645 million
    high materiality
    High
    Q2 FY27 Jimmy Choo Revenue
    approximately $135 million
    medium materiality
    High
    Q2 FY27 Operating Income
    approximately $10 million
    high materiality
    High
    Q2 FY27 Michael Kors Operating Margin
    high single-digit percent range
    medium materiality
    High
    Q2 FY27 Jimmy Choo Operating Margin
    negative mid-single-digit percent range
    medium materiality
    High
    Q2 FY27 Net Interest and Other Income
    approximately $25 million
    low materiality
    High
    Q2 FY27 Effective Tax Rate
    mid-30% range
    low materiality
    High
    Q2 FY27 Weighted Average Shares Outstanding
    approximately 112 million
    low materiality
    High
    Q2 FY27 Diluted EPS
    approximately $0.20
    high materiality
    High
    Michael Kors Long-term Revenue
    $4 billion
    high materiality
    High
    Michael Kors Long-term Operating Margin
    low 20%
    high materiality
    High
    Jimmy Choo Long-term Revenue
    $800 million
    high materiality
    High
    Jimmy Choo Long-term Operating Margin
    low double-digit range
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Total Company
    Revenue, operating income and earnings per share above expectations. Operating margin expanded 110 basis points. Constant currency revenue growth was -4.1%.
    		$769 million-3.5%—Operating income $28 million
    Michael Kors
    Revenue slightly above expectations. Impacted by quality of sale initiatives. Full-price comparable store sales positive in Americas and China. Wholesale revenue declined low single digits, but point-of-sale trends positive, led by double-digit increase in accessories. Constant currency revenue growth was -7.6%.
    Global retail sales: high single digits declineAmericas revenue: -10%EMEA revenue: -5%Asia revenue: +6%
    		$590 million-7.1%—Operating margin 9.3%
    Jimmy Choo
    Revenue exceeded expectations. Growth broad-based across channels, regions, and categories. Strong demand for the brand. Constant currency revenue growth was +9.3%.
    Global retail sales: low double digits increaseWholesale revenue: low double digits increaseAmericas revenue: +26%EMEA revenue: +5%Asia revenue: +3%
    		$179 million+10.5%—Operating margin 7.3%

    Operational metrics

    32
    Operating income growth
    40%YoY
    Q1 FY27

    Total company operating income increased approximately 40%.

    Diluted EPS
    $0.67up approximately 30% compared to prior year
    Q1 FY27

    This strong profit growth drove earnings per share of $0.67, up approximately 30% compared to the prior year.

    Gross margin
    65%increased 200 bps versus last year
    Q1 FY27

    Gross margin of 65%, increased 200 basis points versus last year, driven primarily by higher full price sell-throughs as well as lower tariff rates versus the first quarter of fiscal '26.

    Operating expenses
    decreased $10 millionYoY
    Q1 FY27

    Total company operating expenses decreased $10 million due primarily to cost savings initiatives more than offsetting inflationary cost pressures.

    Operating expense as % of revenue
    61.4%compared to 60.5% last year
    Q1 FY27

    As a percent of revenue, operating expense was 61.4% compared to 60.5% last year, reflecting expense deleverage on lower revenue.

    Cash balance
    $114 million
    Q1 FY27 end

    We ended the quarter with cash of $114 million.

    Debt balance
    $338 million
    Q1 FY27 end

    and debt of $338 million.

    Net debt
    $224 milliondown from approximately $1.5 billion last year
    Q1 FY27 end

    resulting in net debt of $224 million, down from approximately $1.5 billion last year.

    Share repurchase amount
    $50 million
    Q1 FY27

    repurchasing approximately $50 million worth of shares during the quarter.

    Share repurchase authorization remaining
    $871 million
    Q1 FY27 end

    We have an additional $871 million of availability remaining under our share repurchase authorization.

    Inventory
    $624 million20% decline year-over-year
    Q1 FY27 end

    Inventory at quarter end was $624 million, a 20% decline year-over-year.

    Inventory decline
    high single digitsYoY
    Q2 FY27

    Second quarter inventory is now expected to decline high single digits, reflecting continued delays.

    Inventory reduction split (delay vs markdown)
    50-50 split
    Q1 FY27

    it's about a 50-50 split, and it comes in at about $50 million in lower markdown inventory, just to give you a size of the magnitude of the reduction in markdown inventory.

    Third-party sales headwind
    $150 million
    FY26

    it amounted to approximately between that and some other third-party sales, about $150 million for us.

    Marketing spend increase
    almost 200 bps
    H2 FY27

    we are increasing our marketing spend for the company. We're getting close to -- we're going to raise it by almost 200 basis points. We're getting close to 10% of sales, especially in the back half of the year.

    Gross margin
    63.9%increased 280 bps versus last year
    Q1 FY27

    By brand, Michael Kors gross margin of 63.9% increased 280 basis points versus last year, driven primarily by higher full price sell-throughs and lower tariff rates, partially offset by channel mix.

    Operating margin decline
    60 bpsYoY
    Q1 FY27

    Compared to last year, operating margin declined 60 basis points with higher gross margins more than offset by expense deleverage on lower revenue.

    Global consumer database increase
    8%YoY
    Q1 FY27

    Collectively, these activities helped drive an 8% year-over-year increase in the Michael Kors global consumer database.

    Inventory decline
    approximately 25%YoY
    Q1 FY27 end

    This decrease reflected an approximately 25% decline at Michael Kors, driven by a planned reduction in markdown inventory levels as well as in-transit delays.

    Outlet new product penetration (accessories)
    around 75%
    Q3 FY27

    We feel very confident that we'll be, as I've said previously, around 75% in particular, in the accessories world, a little -- it's going to take us a little longer in the footwear side of things to get the product flowed into outlet.

    Ready-to-wear price reduction
    almost 40%
    Spring last year

    we lowered ready-to-wear prices by almost 40%, and that's been one of the highest percentage increase businesses for us in our full price category.

    Outlet price increase
    5% to 10%
    Q1 FY27

    I'd say prices have been raised anywhere from 5% to sort of 10%.

    Outlet full-price product sales
    5% and 6%
    Q1 FY27

    We're running anywhere between 5% and 6% of sales in the stores that we have our full-price product in the channel.

    Gross margin
    68.7%compared to 70.4% last year
    Q1 FY27

    Jimmy Choo gross margin of 68.7% compared to 70.4% last year, lower primarily due to channel mix.

    Operating margin increase
    480 bpsYoY
    Q1 FY27

    Jimmy Choo operating margin of 7.3% was above our expectations and increased 480 basis points compared to the prior year, primarily driven by expense leverage on better-than-anticipated revenue and cost containment actions.

    Global consumer database increase
    7%YoY
    Q1 FY27

    Taken together, these initiatives are driving increased desirability and deepening consumer reach, contributing to a 7% increase in Jimmy Choo's global consumer database year-over-year.

    VIC sales increase
    40%
    Q1 FY27

    pairing rich storytelling with exclusive experiences that deepened engagement among our top clients and drove a 40% increase in VIC sales.

    Accessories sales growth
    double digitsYoY
    Q1 FY27

    Accessories continued to be an area of strength with sales increasing double digits versus last year.

    Influencer reach
    36 million
    Q1 FY27

    group of 16 content creators from around the world with a combined following of more than 36 million people.

    Influencer campaign impressions
    nearly 50 million
    Q1 FY27

    The event generated nearly 50 million impressions across key markets while showcasing Jimmy Choo through aspirational content-rich experiences.

    Pricing architecture (bags)
    $750 to $6,000
    Q1 FY27

    we have everything from $5,000, $6,000 Bon Bon bags for the ultra-luxury VICs to our new opening price points between $1,500 and $750 on bag on bags like bar.

    Pricing architecture (footwear)
    $350 to $3,000
    Q1 FY27

    our bridal product, which can be $2,000, $3,000 for shoes, and we have things that open up at $350 to $400.

    Industry KPIs

    8
    MetricValueDetails
    Effective tax ratelow teens range%
    Inventory position$624 millionUSD
    Revenue by channel—
    Operating margin sg a3.6%%
    Store fleet door investment—
    Share buyback capital return$50 millionUSD
    Tariff cost exposure recovery—
    Franchise product cycle performance—

    Product announcements

    8
    ProductTypeDetails
    Saimylaunch
    Ashtonlaunch
    Baileylaunch
    Nolan sneaker, Pixie, Jelly Beet Flat, JC Floral embellish sandallaunch
    Sculptural Glace Mule, Jelly Drop sandal, Cinch baglaunch
    Bar, Curvelaunch
    Faiz Lace Pumplaunch
    Margo Flatlaunch

    Risks & headwinds

    6
    Lower-than-anticipated inventory levels at Michael KorsQ2 FY27

    $50 million impact on Q2 Michael Kors revenue

    Mitigation: Taking actions to accelerate inventory receipts, including increased use of air freight.

    Softer trends in EMEAQ2 FY27 and remainder of FY27

    $50 million impact on FY27 Michael Kors revenue outlook; $15 million impact on Q2 Michael Kors revenue

    Mitigation: Reflected in revised guidance; hoping for conflict resolution.

    Updated foreign currency exchange rate assumptionsQ2 FY27 and remainder of FY27

    $35 million impact on FY27 Michael Kors revenue outlook; $10 million impact on Q2 Michael Kors revenue

    Mitigation: Reflected in revised guidance.

    Timing shift of wholesale shipmentsQ2 FY27

    $10 million impact on Q2 Michael Kors revenue

    Mitigation: Benefited Q1, now impacting Q2.

    Impact of quality of sale initiatives (reduced promotions, third-party sales, off-price shipments) on Michael Kors revenueNear-term, Q1 and Q2 FY27

    Creating near-term pressure on revenue.

    Mitigation: Deliberate steps to strengthen long-term brand foundation, expected to mitigate post-October/November for third-party sales.

    Negative impact of store closures on Michael Kors retail salesQ1 FY27

    low single-digit range

    Mitigation: Similar to prior quarters.

    What to watch in Q2 FY27

    5

    Michael Kors revenue growth

    Back half of FY27 (starting Q3)
    Current-7.1% YoY (Q1 FY27)
    TargetReturn to growth

    Why it matters

    Indicates successful execution of strategic initiatives, new product introductions, and normalization of promotional activity.

    While we are disappointed with our second quarter outlook, we expect Michael Kors revenue to return to growth in the back half of fiscal '27 driven by new product introductions, increased marketing investments, the beginning of a normalization in promotional activity and the increasing benefit from our store renovation program.

    Q&A highlights

    7

    Breakdown of Q1 high single-digit retail sales decline (full-price vs. outlet), Q2 retail sales expectations, and changes to back-half outlook beyond EMEA macro.

    John Idol highlighted improved quality of sales, higher full-price sell-throughs, and increased AURs. Full-price retail sales were positive in North America and Asia, but EMEA declined due to conflict and reduced tourism. Outlet trends remained down due to limited new product, but new product flow is expected in Q3. Q2 will see a final step back in markdown inventory reduction and delayed new product, impacting sales, but Q3 is seen as a significant inflection point with new product and cycling of third-party sales.

    “Our full price sell-throughs at both companies were up. Our AURs at both companies were up. And when I look at the health of the sale to the customer, it's getting better each quarter.”

    asked by Matthew Boss · answered by John Idol

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Initiatives & Brand Elevation

    Capri Holdings is focused on strengthening brand desirability through compelling storytelling, innovative product design, and elevated customer experiences across Michael Kors and Jimmy Choo. These initiatives are supported by data analytics to drive personalized interactions and investments in store renovations, IT, and digital enhancements. The company aims to leverage its increasing cash flow to support brand momentum and return capital to shareholders.

    02

    Michael Kors Quality of Sales Focus

    Michael Kors' revenue decline of 7% YoY was influenced by deliberate quality of sales initiatives, including reduced promotional activity, third-party sales, and off-price shipments. Despite near-term revenue pressure, these actions led to higher full-price sell-throughs, increased Average Unit Retail (AURs), and gross margin expansion, indicating a stronger business model. The company expects these efforts to drive more profitable growth as sales recover.

    03

    Jimmy Choo Momentum & Profitability

    Jimmy Choo demonstrated strong momentum with revenue increasing 10.5% YoY, driven by broad-based growth across channels, regions, and categories. The brand's marketing and product strategies are attracting new and younger consumers, expanding accessories, and growing casual footwear. This performance positions Jimmy Choo to return to profitability in fiscal 2027, supported by strong revenue growth, gross margin expansion, and disciplined expense management.

    04

    Inventory Management & Supply Chain

    The company ended Q1 with inventory down 20% YoY, including a 25% decline at Michael Kors due to planned markdown reductions and in-transit delays. While Q2 inventory is expected to decline high single digits due to continued delays, actions like increased air freight are being taken to normalize levels. Inventory is expected to build through the back half of the year to support planned revenue growth.

    05

    Store Renovation Program

    Michael Kors is actively pursuing a store renovation program to evolve its jet-set lifestyle positioning with immersive customer experiences. Early results from renovated locations, including new flagship stores in Beijing and Kuala Lumpur featuring Jet Set lounges, show significant sales increases. The company plans to renovate over 300 owned stores and refresh a significant amount of department store doors, expecting a much bigger lift in the next fiscal year.

    06

    Marketing & Consumer Engagement

    Both brands are leveraging global campaigns, brand ambassadors, and influencer events to amplify brand awareness and deepen consumer engagement. Michael Kors saw an 8% increase in its global consumer database, while Jimmy Choo's database grew 7%. Increased marketing spend, particularly focused on top-of-funnel and brand storytelling, aims to attract new, younger consumers, especially Gen Z, through platforms like Amazon and TikTok.

    AI-generated summary of the company’s earnings call. Not investment advice.