Capri posts $45 million adjusted profit, sending shares up 8.4%

By Rebecca Stone

Capri Holdings reported $45 million in adjusted earnings for the fiscal second quarter ended Sept. 26, sending shares up 8.4% to $17.40 in Friday premarket trading. Revenue fell 5.5% to $809 million, or 4.9% in constant currencies.

Earlier-than-expected wholesale shipments added roughly $20 million to the quarter. The amount included $15 million of Michael Kors sales and $5 million of Jimmy Choo sales. No comparable revenue figure excluding that benefit appears in the reported results.

What drove Capri’s profit beat?

Gross margin expanded to 63.3% from 61% a year earlier. Capri attributed the increase to “higher full-price sell-throughs, brand mix and lower tariff rates.” The company did not quantify each contribution. For sourcing teams, lower tariffs affect cost, while full-price sell-through and brand mix affect realized margin.

Adjusted earnings of $45 million equaled 42 cents on a diluted share. Yahoo Finance reported that analysts had expected a 21-cent profit, compared with a 3-cent loss a year earlier. Net income reached $27 million versus a $34 million loss last year.

Shares had fallen 34.2% in the year to date before the release. The 8.4% premarket rebound recovered part of that decline, but not all.

How did Michael Kors and Jimmy Choo perform?

• Michael Kors generated $663 million, with revenue down 8% in constant currencies.
• Jimmy Choo generated $146 million, with revenue up 12.2% in constant currencies.

Jimmy Choo supplied the clear growth within a shrinking group. Michael Kors remained much larger, but its constant-currency decline drove the consolidated revenue contraction. The reported results provided no order-book, unit-volume or inventory figures showing how wholesale timing affected each brand.

John Idol, chairman and chief executive officer, said:

“We are encouraged by the momentum building at both Michael Kors and Jimmy Choo. 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.”

Idol said Capri believed those initiatives were beginning to position both brands for sustainable growth. For brand and sourcing teams, the monthly improvement remains a management claim rather than a measured factory or order signal. Capri disclosed no production volumes, lead times or vendor commitments alongside the results.

What does the guidance require?

Idol set the central expectation:

“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.”

He also said he remained confident the efforts would deliver sustainable growth and meaningful shareholder value over time. The statement combines an intention with supporting plans, not booked orders or an achieved sales increase. Capri did not disclose the marketing budget behind that planned increase.

Capri expects full-year sales to decline about 1.4% to $3.42 billion. Diluted earnings per share should reach roughly $2.20, five cents above its prior $2.15 forecast. The raised profit outlook therefore sits alongside continued full-year sales contraction, and both figures remain company guidance rather than measured outcomes.

Does buyer interest change the operating case?

WWD reported in September that Capri had attracted interest from prospective buyers, although no deal appeared on the immediate horizon. The report identified no buyer. Without a transaction, that interest creates no immediate change to factory capacity, purchase commitments or payment terms.

What should supply-chain teams watch?

Capri’s next test comes in the second half of fiscal 2027, when management expects revenue growth from new collections and higher marketing investment. The relevant measure is whether reported growth follows the claimed monthly sell-through improvement once the quarter’s roughly $20 million wholesale timing benefit drops out of comparisons.