Latest news with #CapriHoldings
Yahoo
3 days ago
- Business
- Yahoo
Capri posts $53m profit amid declining sales in Q1 2026
Capri Holdings, which owns luxury brands such as Versace, Michael Kors and Jimmy Choo, reported a 6% decline in total revenue on a reported basis to $797m in the first quarter (Q1) of fiscal 2026 (FY26) and a 7.7% drop on constant currency year-on-year (YoY). The company states that this signifies a 'sequential improvement' when compared to the YoY performance in Q4. The group's financial results have been adjusted to exclude Versace, now reclassified as a discontinued operation. The company's reported outcomes focus on continuing operations, and 'financial statements have been adjusted for prior periods to exclude Versace'. Capri signed an agreement with Prada to sell its Versace business for $1.38bn cash in April 2025. The company expects the transaction for the sale of Versace to complete in the second half of 2025. Gross profit for Capri was posted at $502m with a gross margin of 63%. Net income attributable to Capri stood at $53m, with diluted earnings per share amounting to $0.47. The company's performance surpassed expectations due to stronger-than-anticipated outcomes from both Michael Kors and Jimmy Choo, as the impact of strategic initiatives began to materialise. The reported results also include a discrete tax benefit. Michael Kors saw a 5.9% revenue decline to $635m over the quarter, with an operating income of $63m. Jimmy Choo also posted a revenue decrease of 6.4% to $162m, maintaining an operating income of $4m. Capri chairman and CEO John Idol stated: "We are encouraged by our first quarter results. Trends improved sequentially leading to both revenue and earnings per share that exceeded our expectations.' In FY26, the company is expecting total revenue to be between $3.375bn and $3.45bn, and an operating income of around $100m. During the earnings call, interim chief financial officer Raj Mehta said: 'We are raising prior revenue guidance to reflect the recent weakening of the US dollar as well as our outperformance in the first quarter.' He added: 'While we are encouraged by our first quarter results and the early signs that our strategic initiatives are working, the global macroeconomic environment remains dynamic. 'Our updated guidance reflects incremental tariff rates on imports from China at 30%, India at 25%, the rest of Asia at 19% to 20% and the European Union at 15%. As a result, we now estimate unmitigated impact of tariffs on products shipped into the United States will increase our cost of goods sold by approximately $85m in fiscal 2026, up from our prior estimate of approximately $60m.' For the second quarter FY26, the company forecasts total revenue between $815m and $835m, with a slightly positive operating margin. "Capri posts $53m profit amid declining sales in Q1 2026" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Capri Shows Signs of Stabilization, CEO John Idol Plans to Keep Jimmy Choo
Updated at 5:25 p.m. ET Aug. 6 The declines are slowing at Capri Holdings — but there's still plenty of work to do before the Michael Kors and Jimmy Choo parent gets its stride back. More from WWD Rihanna's Maternity Shoe Style Gets a Wild Update With Python Heels by Jimmy Choo Gucci, Bottega Veneta, Versace, Jil Sander Debuts Headline Packed Milan Fashion Week Spring 2026 Schedule Jenna Ortega Makes Metallic Jimmy Choo Sandals Her Red Carpet Staple at 'Wednesday' Premiere At least the company is on a better trajectory and chief executive officer John Idol was able to say that 'trends improved sequentially' in the first quarter. Investors liked what they saw and sent shares of the company up 14.5 percent to $20.84 on Wednesday, leaving the company with a market capitalization of $2.5 billion. Capri is still a long way off from the $57 per share Tapestry Inc. once agreed to pay for the company, but at least the firm is out of the doldrums it was in before antitrust regulators blocked the deal. Now the company has a $1.4 billion agreement to sell Versace to Prada, which will let Capri take a big bite out of its $1.7 billion debt load and help fuel a branded turnaround. 'While still early, we are beginning to see signs that our strategies are working,' Idol told analysts on a conference call. 'Although the global macroeconomic environment remains dynamic, we are on track to stabilize our business this year while establishing a strong foundation for a return to growth in fiscal '27.' And Idol maintained that the company — which took its name from the island of Capri, its three rock formation symbolically tied to the group's three founder-led brands — would carry on with the two brands. 'Jimmy Choo is not for sale,' Idol said. 'We do not have an intent on selling Jimmy Choo.' But the firm does have plans to ramp Michael Kors sales up to $4 billion in annual revenues, from $3 billion last year, and Jimmy Choo up to $800 million from $605 million 'over time.' First the company has to get back to growth. Capri's first-quarter net income rose to $56 million from $5 million a year earlier, with adjusted profits up to $60 million from $18 million. Adjusted earnings per share tallied 50 cents — much better than the 12 cents analysts had penciled in, according to Yahoo Finance. Revenues for the three months ended June 28 slipped 6 percent to $797 million. That included results from Michael Kors, where sales were down 5.9 percent, and Jimmy Choo, which was off 6.4 percent. The Versace business was not included as it is being categorized as a discontinued operation. Although the company hyped its sequential improvement — and Idol got plenty of kudos for it from analysts on the conference call — it was a relatively low bar as fourth-quarter adjusted losses totaled $581 million with a 15.4 percent decline in sales. But there was some progress there to celebrate. 'In our retail channel, we are starting to see encouraging signs of momentum,' Idol said, pointing to both better traffic trends in the full-price stores, more full-price sell throughs on new styles and a positive turn in the average unit retail prices. 'We view these as early but meaningful indicators that our strategies are gaining traction,' Idol said. Michael Kors has exited 30 percent of its U.S. department stores over the past year and is on track to close 75 underproductive stores of its own this year. Idol said the Michael Kors full price channel would be the first part of the brand to turn around. 'We're getting close to that right now,' he said. 'That's a very good indicator, as you know. If you've got the full price channel working, that's an area where you can really kind of solidify the rest of the company. 'We moved very quickly last October, November around the full price,' the CEO said. 'It was making sure that we got different product to the floor more quickly. We took a very focused approach to our strategic pricing architecture and that is absolutely paying off.' The brand is also going to start selling some of its full-price looks in its outlet channel with a program called Icons, which mirrors what other brands have done. Capri also plans to spend $350 million on store renovations over the next three years and to start to see what Idol said would be 'very nice returns on the $100-plus million that we spent over the last couple of years on our data analytics and replatforming our e-commerce areas.' While sources have said that Capri tried to sell Jimmy Choo this year and that there have been interested parties, including the brand's co-founder Tamara Mellon, Idol was clear he planned to hold onto the brand. 'We're excited about the growth opportunity that Jimmy Choo represents for the company,' he said. 'When we bought Jimmy Choo many years ago, one of the reasons we bought it is because it has an incredible name and history and heritage with the fashion luxury consumer. It's highly recognized. And it is in the shoe business, and we thought we would actually learn a lot from them, which we have. 'Over the years, I'm not sure this has been clear, but we've actually bought two manufacturing facilities,' Idol said. 'So we produce over 50 percent of our own product in-house. We are truly vertical with Jimmy Choo's two beautiful factories that we have in Italy… Store fleet is in excellent shape. We spent a lot of money over the years renovating the stores… And so the investments we've made, now we can leverage.' Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fibre2Fashion
5 days ago
- Business
- Fibre2Fashion
US' Michael Kors & Jimmy Choo see dip as Capri targets FY27 growth
American luxury group Capri Holdings Limited has reported a total revenue of $797 million, reflecting a decline of 6 per cent on a reported basis and 7.7 per cent in constant currency in the first quarter (Q1) of fiscal 2026 (FY26) ended June 28, 2025. This excludes the performance of Versace, which has been classified under discontinued operations following a $1.375 billion acquisition agreement with Prada SpA, expected to close in the second half of calendar year 2025, Capri Holdings said in a press release. Capri Holdings has reported revenue of $797 million in Q1 FY26, down 6 per cent, excluding Versace, which is under a $1.375 billion sale to Prada. Net income rose to $56 million. Michael Kors and Jimmy Choo saw revenue declines. FY26 revenue is projected at $3.37â€'$3.45 billion. The company aims to stabilise in FY26 and return to growth in FY27, focusing on Michael Kors and Jimmy Choo. The company reported a gross profit of $502 million, with a gross margin of 63 per cent, nearly flat compared to 63.1 per cent in the prior year. The operating income rose to $16 million from $11 million last year, improving the operating margin to 2 per cent. On an adjusted basis, the operating income of the group stood at $20 million, with an adjusted margin of 2.5 per cent, down from 3.7 per cent in the prior-year period. The company posted a net income of $56 million or $0.47 per diluted share, compared to $5 million or $0.03 per diluted share in Q1 FY25. The adjusted net income was $60 million or $0.50 per share, a notable increase from $18 million or $0.16 per share last year. Inventory levels increased by 10.8 per cent year-over-year to $779 million, driven by $50 million in planned early receipts and an additional $25 million impact from foreign currency exchange and tariffs. The company generated $20 million in cash flow from operations, spent $13 million in capital expenditures, and ended the quarter with $129 million in cash and $1.7 billion in total borrowings, resulting in net debt of $1.5 billion—unchanged from the prior year. Segment-wise, Michael Kors revenue fell by 5.9 per cent to $635 million, or 7.3 per cent in constant currency. It delivered a gross profit of $388 million with a margin of 61.1 per cent and operating income of $63 million, resulting in a 9.9 per cent operating margin. Jimmy Choo's revenue stood at $162 million, down 6.4 per cent on a reported basis and 9.2 per cent in constant currency. It posted a gross profit of $114 million, improving its gross margin to 70.4 per cent from 67.1 per cent last year. The brand's operating income was flat at $4 million, with a slightly improved margin of 2.5 per cent. 'We are encouraged by our first quarter results. Trends improved sequentially leading to both revenue and earnings per share that exceeded our expectations. This performance demonstrates the progress we are making as we execute against our strategic initiatives to energise our fashion luxury houses. While still early, we are beginning to see signs that our strategies are working,' said John D Idol, chairman and chief executive officer (CEO) at Capri Holdings. Looking ahead, Capri Holdings is expecting revenue between $3.37 billion and $3.45 billion in FY26, with operating income of approximately $100 million and net interest income ranging from $85 to $95 million. The effective tax rate is projected to be in the mid-teens, and diluted earnings per share (EPS) is forecast between $1.2 and $1.4. Michael Kors is expected to generate $2.80 to $2.875 billion in revenue with a high-single-digit operating margin, while Jimmy Choo is projected to earn $565 to $575 million in revenue but will operate at a negative mid-single-digit margin. For the second quarter (Q2) of FY26, Capri Holdings anticipates revenue between $815 million and $835 million, with a slightly positive operating margin. Net interest income is expected to be around $15 million and the tax rate approximately 40 per cent. EPS for Q2 is forecast between $0.10 and $0.15. Michael Kors is expected to contribute $685 to $700 million in revenue with a high-single-digit margin, and Jimmy Choo is projected to generate $130 to $135 million in revenue, maintaining a negative mid-single-digit margin. The outlook incorporates assumed tariffs ranging from 15 to 30 per cent on imports from key sourcing countries, including China, India, Vietnam, Cambodia, Bangladesh, Indonesia, and the European Union (EU), added the release. 'Looking ahead, with the Versace transaction is expected to close in the second half of calendar year 2025, we are focused on executing the strategic initiatives across our two iconic brands, Michael Kors and Jimmy Choo,' added Idol. 'We remain on track to stabilise our business this year while establishing a solid foundation for a return to growth in fiscal 2027.' Fibre2Fashion News Desk (SG)
CTV News
5 days ago
- Business
- CTV News
Michael Kors owner Capri forecasts upbeat revenue, shares jump
Capri Holdings forecast second-quarter revenue above estimates on Wednesday, after its turnaround strategy and improving demand for luxury handbags and footwear helped the Michael Kors owner defy a broader retail slowdown. The company also beat estimates for quarterly profit and revenue, sending its shares up 12 per cent in morning trading, even as Capri forecast a bigger tariff impact on costs than earlier estimated. Investors have been hoping for signs of strength from Capri, after it lost nearly 44 per cent of its stock value over the past year and competitors gained more market share. In an attempt to stem the declines, Capri kicked off a turnaround strategy that included shedding its struggling Versace label to Italy's Prada earlier this year. It is also implementing cost-saving measures such as headcount reductions, store renovations and efficiency improvements across its supply chain. To power sales, the company has been ramping up its marketing efforts, building out its social media presence and expanding its network of influencer partnerships, CEO John Idol said during a post-earnings call. As a result, Michael Kors revenue, which represents 68 per cent of Capri's total, fell only 5.9 per cent in the quarter, compared with a 14.2 per cent drop a year ago. 'The sequential improvement in demand suggests that Capri's focus on making its brand more desirable - through marketing and more exciting product launches - are beginning to resonate with shoppers,' said Rachel Wolff, analyst with eMarketer. It expects tariffs on products shipped into the U.S. to increase costs by about $85 million in fiscal 2026, compared with $60 million projected earlier. The company -which imports the majority of U.S. products from Vietnam, Cambodia, Indonesia, Bangladesh and China - plans to offset the impact through sourcing optimization, cost efficiencies with partners, and price hikes. It also expects second-quarter revenue of about US$815 million to $835 million, compared with estimates of $819.1 million, per data compiled by LSEG. Profit of 50 cents per share beat estimates of 13 cents. Net revenue fell six per cent to $797 million, compared with estimates of $793.1 million. (Reporting by Anuja Bharat Mistry in Bengaluru and Samantha Marshak in New York; Editing by Devika Syamnath)
Yahoo
5 days ago
- Business
- Yahoo
Capri stock gains on strong Q1 display and rosy full-year guidance
-- Capri Holdings (NYSE:CPRI) saw its shares more than 5% after the company offered upbeat annual guidance following its better-than-expected fiscal first-quarter results. The Michael Kors owner posted Q1 earnings per share (EPS) of $0.50, notably above the $0.12 consensus estimate. Revenue for the quarter fell 7.7% in constant currency to $797 million, though it was still ahead of expectations of $773.1 million. Capri reported an adjusted operating margin of 2.5%. "We are encouraged by our first quarter results. Trends improved sequentially leading to both revenue and earnings per share that exceeded our expectations," John D. Idol, Chairman and CEO of Capri, said. "We remain on track to stabilize our business this year while establishing a solid foundation for a return to growth in fiscal 2027. Although the global macroeconomic environment remains dynamic, we are focused on positioning Capri Holdings to deliver multiple years of revenue and earnings growth as well as increase shareholder value." Operating cash flow for the quarter was $20 million, while capital expenditures totaled $13 million, resulting in free cash flow of $7 million. Looking ahead, Capri guided Q2 EPS between $0.10 and $0.15, below the consensus of $0.28, but projected revenue of $815–835 million, ahead of the $799.7 million estimate. For the full fiscal year 2026, the company expects EPS in the range of $1.20 to $1.40, with the midpoint of that range ahead of the consensus of $1.27. Revenue is projected between $3.375 billion and $3.45 billion, also above the $3.36 billion average estimate. For the Michael Kors brand, the company expects total revenue to range between $2.8 billion and $2.875 billion, with an operating margin projected in the high single digits. Related articles Capri stock gains on strong Q1 display and rosy full-year guidance Surge of 50% since our AI selection, this chip giant still has great potential Apollo economist warns: AI bubble now bigger than 1990s tech mania Sign in to access your portfolio
