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Capri returns to profit as quarterly sales decline

Luxury group Capri Holdings returned to a quarterly profit as higher margins outweighed falling sales at Michael Kors. Revenue fell 5.5 per cent to 809 million dollars, while net income reached 27 million dollars. Jimmy Choo grew, and management raised its fiscal 2027 outlook. Earlier wholesale shipments also shifted revenue into the reported quarter.

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Side view of a sales associate presenting a leather handbag to a customer in a luxury accessories boutique, beside bags arranged on a pale stone counter.

Higher margins restore earnings

Capri Holdings, the luxury fashion group behind Michael Kors and Jimmy Choo, recorded net income of 27 million dollars in its second fiscal quarter, reversing a loss of 34 million dollars a year earlier. Revenue fell 5.5 per cent to 809 million dollars in the quarter ended 26 September. The results cover continuing operations, with the sold Versace business classified separately.[1], [2]

Gross margin rose from 61.0 per cent to 63.3 per cent. Capri attributed the increase to more full-price sales, brand mix and lower tariffs. Reported diluted earnings were 0.25 dollars per share; adjusted earnings were 0.42 dollars, excluding specified items under its non-standard accounting measure.[1]

Jimmy Choo grows as Michael Kors contracts

Michael Kors revenue declined 8.6 per cent to 663 million dollars, while Jimmy Choo revenue rose 11.5 per cent to 146 million dollars. About 20 million dollars of group revenue came from wholesale shipments made earlier than expected, moving sales from the third quarter into the second. Inventories fell 7 per cent to 712 million dollars.[1]

Management raises its full-year outlook

The group lifted its fiscal 2027 outlook to approximately 3.42 billion dollars in revenue and adjusted diluted earnings of 2.20 dollars a share. Management continued to expect revenue growth in the second half. During the reported quarter, operating cash flow was 51 million dollars and capital spending 15 million dollars, leaving free cash flow of 36 million dollars.[1]

References

  1. News sourceCapri HoldingsCapri returns to profit despite lower revenue↩1↩2↩3↩4
  2. News sourceAD HOC NEWSCapri returns to profit despite falling quarterly revenue↩
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