Capri Holdings Reports Fiscal 2026 Results: Revenue Decline Amidst Strategic Shifts
Capri Holdings Limited, a global luxury fashion group known for its iconic brands Michael Kors and Jimmy Choo, has released its annual report for fiscal 2026, revealing a challenging year marked by revenue declines and strategic business transitions. The company's commitment to craftsmanship and style remains steadfast, but macroeconomic pressures have tested its resilience in the competitive luxury market.
1. Financial Performance Overview
Revenue Trends
Capri Holdings reported total revenue of $3.474 billion for fiscal 2026, a decrease of $147 million or 4.1% compared to the previous year. This decline was primarily driven by weaker sales from both of its flagship brands, Michael Kors and Jimmy Choo.
- Michael Kors experienced a revenue drop of $142 million, attributed to reduced promotional activities and a strategic focus on the quality of sales rather than volume.
- Jimmy Choo's revenue declined by $5 million, reflecting a slowdown in demand for certain luxury goods.
The geographical analysis of revenue highlights a contrasting performance within regions. The Americas saw an 8.56% decline, while EMEA (Europe, the Middle East, and Africa) exhibited growth of 5.36%.
Profitability Metrics
Gross profit also fell by $88 million, resulting in a gross profit margin of 62.3%. While Michael Kors saw a decline in gross profit, Jimmy Choo managed to achieve slight growth through improved sell-through rates. Operating expenses decreased by $137 million, showcasing the company's efforts to implement cost-saving measures and reduce retail-related costs.
- Income from Continuing Operations: Capri Holdings posted an income of $23 million, a significant turnaround from the loss of $26 million reported in fiscal 2025.
Income Statement Highlights
The income statement for fiscal 2026 reveals a net income of $137 million, a remarkable recovery from the substantial loss of $1.18 billion in the previous year. This recovery underscores the effectiveness of strategic adjustments and operational improvements undertaken by the company.
| May 2025 | May 2026 | |
|---|---|---|
Net Income | -1.18B | 137M |
Net Income to Non-controlling Interest | 3M | 1M |
Profit | -1.17B | 138M |
Net Income Discontinued | 0 | 58M |
Net Income Continuing | -1.17B | 80M |
Income Tax Expense | 452M | 27M |
Pretax Income | -727M | 107M |
Non-operating Income | 25M | 84M |
Operating Income | -752M | 23M |
Revenue | 4.44B | 3.47B |
Costs and Expenses | 5.19B | 3.45B |
Cost of Revenue | 1.61B | 1.31B |
Operating Expenses | 3.57B | 2.14B |
Depreciation, Depletion & Amortization | 193M | 121M |
Impairment Expense | 797M | 40M |
Restructuring Charge | 7M | 15M |
Selling, General & Administrative | 2.58B | 1.96B |
2. Segment Analysis
Performance by Brand
- Michael Kors: Generated $2.87 billion in revenue, reflecting a 4.71% decrease from the prior year.
- Jimmy Choo: Reported $600 million in revenue, down 0.83%.
The luxury segment continues to remain competitive, with Capri Holdings focusing on innovation and quality to drive brand equity.
Product Categories
Revenue by product category revealed declines across the board, particularly in apparel and accessories. Footwear, which remains a key segment, generated $853 million, down 3.94% from the previous year.
3. Geographic Insights
The geographical breakdown of revenue further illustrates the challenges faced in different markets. The Americas represented the largest share of revenue for Capri Holdings, yet the decrease in sales highlights the need for renewed marketing strategies in this vital region.
4. Strategic Developments
Sale of Versace
A pivotal event during the fiscal year was the completion of the sale of the Versace brand for $1.395 billion in December 2025. This strategic divestiture was classified as discontinued operations and is expected to enhance Capri's focus on its core brands.
Termination of Merger Agreement
Capri's intended merger with Tapestry was terminated due to regulatory challenges. The company received approximately $45 million in reimbursement for expenses incurred during the merger process, indicating a strategic pivot back to independent operations.
5. Challenges and Market Conditions
Capri Holdings faced several macroeconomic headwinds during fiscal 2026, including inflationary pressures and geopolitical instability. These factors have affected consumer spending and created volatility in manufacturing costs. The luxury fashion sector is navigating through these turbulent times, requiring agility and strategic foresight to maintain competitiveness.
6. Balance Sheet Position
As of fiscal 2026, Capri Holdings reported total assets of $3.23 billion, a significant decrease from $5.21 billion in fiscal 2025. This reduction reflects the impact of the Versace sale and ongoing operational adjustments.
| May 2025 | May 2026 | |
|---|---|---|
Total Assets | 5.21B | 3.23B |
Total Current Assets | 1.52B | 1.15B |
Cash and Equivalents | 166M | 135M |
Net Inventories | 869M | 581M |
Prepaid Expenses | 209M | 226M |
Total Non-current Assets | 3.69B | 2.08B |
Intangible Assets | 1.80B | 764M |
Net PP&E | 513M | 371M |
Lease Assets | 1.21B | 854M |
Other Non-current Assets | 162M | 92M |
Total Liabilities and Equity | 5.21B | 3.23B |
Total Liabilities | 4.84B | 3.15B |
Total Current Liabilities | 1.33B | 954M |
Accounts Payable and Accrued Liabilities | 962M | 707M |
Current Debt | 374M | 247M |
Total Non-current Liabilities | 3.50B | 2.19B |
Long-term Debt | 1.47B | 343M |
Non-current Deferred Tax Liabilities | 339M | 88M |
Other Non-current Liabilities | 1.69B | 1.76B |
Total Equity and Non-controlling Interests | 372M | 84M |
Total Equity | 368M | 80M |
Non-controlling Interests | 4M | 4M |
7. Cash Flow Dynamics
The cash flow statement revealed a net change in cash of -$30 million for fiscal 2026, primarily driven by net cash used in financing activities of $1.30 billion, which included repayments of debt and share repurchases.
| May 2025 | May 2026 | |
|---|---|---|
Net Change in Cash | -30M | -30M |
Effect of Exchange Rate Changes | -16M | -25M |
Net Cash from Operating Activities | 281M | 77M |
Operating Profit | -1.17B | 138M |
Adjustment to Operating Profit | 1.46B | -61M |
Net Cash from Investing Activities | -53M | 1.21B |
Business & Interest in Affiliates | 9M | 0 |
Productive Assets | 128M | 63M |
Other Investing Activities | 84M | 1.28B |
Net Cash from Financing Activities | -242M | -1.30B |
Debt | -218M | -1.21B |
Equity Issuance/Repurchase | -4M | -81M |
Other Financing Activities | -20M | -1M |
8. Conclusion
Capri Holdings Limited's fiscal 2026 results underscore a year of recalibration amidst challenging market conditions. The company remains committed to its luxury vision while adapting to shifting consumer preferences and operational realities. Moving forward, the focus will likely be on strengthening its core brands—Michael Kors and Jimmy Choo—through innovation, enhanced customer engagement, and strategic positioning in the global luxury market. The path ahead may be fraught with challenges, but Capri's strategic agility and commitment to quality could pave the way for a more resilient future.
