Capri Stock Bounces Back 8.4% on Q2 Profit Beat

by · WWD
From the Michael Kors Collection Spring 2027 ready-to-wear show at New York Fashion Week.Giovanni Giannoni/WWD

Capri Holdings’ revenues continued to decline in the fiscal second quarter, but efforts to elevate the Michael Kors brand boosted full-price sales and gross margins, contributing to better-than-expected profits — and the hardy approval of shareholders.

Revenues for the quarter ended Sept. 26 fell 5.5 percent to $809 million, a 4.9 percent decline in constant currencies. The numbers were flattered by roughly $20 million in sales attributed to earlier-than-expected wholesale shipments, including $15 million of Michael Kors sales and $5 million of Jimmy Choo’s take.

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Michael Kors’ revenue of $663 million equated to an 8 percent decline in constant currencies. Jimmy’s Choo’s sales of $146 million were up 12.2 percent from a year earlier, in constant currencies.

Gross margins rose to 63.3 percent from 61 percent a year ago, a bump the company attributed to “higher full-price sell-throughs, brand mix and lower tariff rates.”

Adjusted earnings tallied $45 million, or 42 cents a diluted share — well ahead of both the 3 cent loss recorded a year earlier and the 21 cent profit analysts had penciled in, according to Yahoo Finance. Net income of $27 million compared with year-ago losses of $34 million.

Shares of Capri, which before the release of the results had been down 34.2 percent for the year so far, bounced back nicely with an 8.4 percent increase to $17.40 in premarket trading on Friday.

“We are encouraged by the momentum building at both Michael Kors and Jimmy Choo,” said John Idol, chairman and chief executive officer, in a statement. “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.

“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,” Idol said. “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.”

For the full year, Cari is expecting sales to slip by about 1.4 percent to $3.42 billion with diluted earnings per share of roughly $2.20, a nickel ahead of the $2.15 the company had forecast.

In September, WWD reported that Capri has attracted the interest of some would-be buyers although no deal was on the immediate horizon.