Capri Holdings Reports Mixed Results for Q2 Fiscal 2026 Amid Strategic Changes

Capri Holdings reported total revenue of $856 million, reflecting a 2.5% decrease compared to the same period last year. When adjusted for currency fluctuations, the revenue decline deepens to 4.2%. The operating margin stood at (1.4%), with an adjusted operating margin of 2.3%. The company experienced a net loss of $34 million, translating to a loss per share of $(0.28), while the adjusted loss per share was $(0.03), impacted by an unexpectedly high tax rate.

John D. Idol, Capri's Chairman and CEO, expressed cautious optimism regarding the results, noting, "We are encouraged by our second quarter results. Trends continued to improve sequentially, which resulted in revenue, gross margin, and operating income exceeding our expectations." He highlighted the upcoming sale of the Versace brand to Prada, expected to close in the fiscal third quarter, as a transformative move for the company. Idol indicated that the proceeds from this sale would be primarily used to reduce debt, enhancing financial flexibility for future investments and potential shareholder returns.

Michael Kors remains the cornerstone of Capri's portfolio, generating $725 million in revenue, down 1.8% year-over-year. The brand's gross profit was $430 million, with a gross margin of 59.3%, slightly lower than the previous year's margin of 61.1%.

Jimmy Choo faced a steeper decline, with revenue totaling $131 million, a 6.4% drop from the prior year. Despite this, the brand's gross margin improved to 70.2%, up from 68.6%. However, it still posted an operating loss of $9 million.

In a noteworthy financial maneuver, Capri Holdings announced a new $1 billion share repurchase program, authorized by its Board of Directors. This initiative, set to commence in fiscal 2027, underscores the company’s commitment to returning capital to shareholders while bolstering its balance sheet following the anticipated Versace sale.

As of September 27, 2025, Capri Holdings reported $120 million in cash and cash equivalents against total borrowings of $1.76 billion, resulting in a net debt of $1.64 billion. The company indicated a potential return to growth in fiscal 2027, anticipating improved retail trends in the latter half of Fiscal 2026.

Looking ahead, Capri Holdings forecasts total revenue between $3.375 billion and $3.45 billion for Fiscal 2026, with an operating income of approximately $100 million. For Michael Kors, anticipated revenue is projected at $2.8 billion to $2.875 billion, while Jimmy Choo expects revenue between $565 million to $575 million.

For the upcoming third quarter, Capri Holdings expects revenue in the range of $975 million to $1.0 billion, with an operating margin between 7.0% and 8.0%. Michael Kors is projected to generate approximately $825 million to $845 million, while Jimmy Choo anticipates revenues of $150 million to $155 million.

Capri Holdings' latest results reflect both challenges and opportunities within its operational framework. As the company navigates the complex landscape of luxury fashion, the strategic divestiture of Versace and a robust share repurchase plan are poised to catalyze a significant transformation. The upcoming months will be pivotal as Capri focuses on revitalizing its two remaining brands while positioning itself for a more financially resilient future.