GET DAILY SIGNALSCapri Holdings (CPRI) Delivers Earnings Beat and Raises Full-Year Guidance
Key Takeaways
- Capri Holdings reported second quarter fiscal 2027 revenue of $809 million, down 5.5% year over year but ahead of analyst consensus estimates.
- Adjusted diluted earnings per share (EPS) came in at $0.42, beating the consensus estimate of roughly $0.21 and reversing a prior-year adjusted loss of $0.03 per share.
- Gross margin expanded 230 basis points to 63.3%, driven by higher full-price sell-throughs, brand mix, and lower tariff rates.
- Michael Kors revenue declined 8.6% to $663 million, while Jimmy Choo revenue rose 11.5% to $146 million, reflecting diverging momentum across the two luxury houses.
- Management raised its full-year fiscal 2027 outlook to approximately $3.42 billion in revenue and about $2.20 in diluted EPS, and guided to a return to revenue growth in the second half.
- The company continued to strengthen its balance sheet, reducing net debt to $336 million from $1.6 billion a year earlier and repurchasing $150 million of shares during the quarter.
Earnings Context and Why It Matters
Capri Holdings' second quarter fiscal 2027 results, reported for the period ended September 26, 2026, offer investors a key progress check on the company's multi-year turnaround. Following the completed sale of its Versace business to Prada in December 2025, CPRI now operates as a focused two-brand luxury group built around Michael Kors and Jimmy Choo. Management has been deliberately reducing markdown inventory and promotional activity at Michael Kors to improve quality of sale, even at the cost of near-term revenue. This report matters because it tests whether those efforts are translating into higher margins and full-price sell-throughs, while Jimmy Choo's sustained double-digit growth and the company's sharp reduction in net debt signal improving financial health heading into the critical holiday season. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Reported Results
Total revenue of $809 million declined 5.5% year over year, though results beat consensus expectations of approximately $786.55 million. About $20 million of revenue reflected earlier-than-expected wholesale shipment timing. On a generally accepted accounting principles (GAAP) basis, net income was $27 million, or $0.25 per diluted share, compared with a net loss of $34 million, or a loss of $0.28 per share, in the prior-year quarter. On an adjusted, non-GAAP basis, diluted EPS was $0.42, well above the roughly $0.21 consensus and a sharp improvement from the prior-year adjusted loss of $0.03 per share.
Gross margin rose 230 basis points to 63.3%, while income from operations was $10 million versus an operating loss of $12 million a year ago. By brand, Michael Kors revenue fell 8.6% to $663 million, pressured by inventory delays and reduced markdown availability, while Jimmy Choo revenue grew 11.5% to $146 million, returning to profitability. The company repurchased 10.3 million shares for $150 million and cut net debt to $336 million from $1.6 billion a year earlier. From what I see, the margin improvement stands out as a clear sign that the quality-of-sale focus is starting to pay off.
Market Reaction and Investor Sentiment
Sentiment heading into the report had been cautious, given the deliberate revenue headwinds from Capri's quality-of-sale strategy and ongoing inventory delays at Michael Kors. The stock advanced following the release, as investors responded positively to the earnings and revenue beats, the meaningful gross margin expansion, the upgraded full-year guidance, and management's confidence in returning to revenue growth during the second half of fiscal 2027. The continued deleveraging of the balance sheet and active share repurchases further reinforced a constructive view among shareholders, even as the top-line decline and dependence on wholesale timing shifts remained points of scrutiny. I’m watching this closely as the market digests how sustainable the margin gains prove to be.
Forward Outlook and Key Factors to Monitor
Looking ahead, management raised its full-year fiscal 2027 guidance to approximately $3.42 billion in revenue and roughly $2.20 in diluted EPS, while projecting a return to total company revenue growth in the second half. For the fiscal third quarter, the company guided to approximately $1.005 billion in revenue and about $0.95 in diluted EPS.
Investors should monitor whether Michael Kors' full-price channel returns to positive growth as inventory availability improves and the impact of its markdown reductions moderates. The company has indicated it expects sequential revenue improvement in the third quarter and growth in the fourth, supported by new product launches, holiday assortments, and its store renovation program.
Jimmy Choo's trajectory is another key factor, with management expecting the brand to remain profitable for the full year. Beyond revenue, gross margin expansion, tariff rate changes, freight and inventory conditions from Asia, and the pace of new store openings are important variables to watch. While the turnaround is showing tangible progress, the durability of the recovery will depend on sustained full-price sell-throughs and consumer demand through the holiday season.
Exploring Opportunities with AI Tools
When I want to compare CPRI against peers or scan for similar setups across the luxury sector, Tickeron’s AI Screener gives me a quick, data-driven way to surface ideas and test technical patterns without spending hours on manual research. It has become a regular part of how I refine my watchlist and confirm whether a name is acting in line with its fundamentals.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
CPRI in upward trend: 10-day moving average crossed above 50-day moving average on September 25, 2026
The 10-day moving average for CPRI crossed bullishly above the 50-day moving average on September 25, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 11 of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 79%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 12, 2026. You may want to consider a long position or call options on CPRI as a result. In 46 of 78 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 59%.
The Moving Average Convergence Divergence (MACD) for CPRI just turned positive on October 30, 2026. Looking at past instances where CPRI's MACD turned positive, the stock continued to rise in 26 of 38 cases over the following month. The odds of a continued upward trend are 68%.
CPRI moved above its 50-day moving average on October 08, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +22.17% 3-day Advance, the price is estimated to grow further. Considering data from situations where CPRI advanced for three days, in 192 of 286 cases, the price rose further within the following month. The odds of a continued upward trend are 67%.
The Aroon Indicator entered an Uptrend today. In 111 of 175 cases where CPRI Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 63%.
Bearish Trend Analysis
The RSI Indicator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 40 of 56 cases where CPRI's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 71%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CPRI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 72%.
CPRI broke above its upper Bollinger Band on October 30, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 10 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 40 (best 1 - 100 worst), indicating steady price growth. CPRI’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 55 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (15.384) is normal, around the industry mean (6.314). P/E Ratio (14.369) is within average values for comparable stocks, (13.183). Projected Growth (PEG Ratio) (0.188) is also within normal values, averaging (0.396). Dividend Yield (0.000) settles around the average of (0.102) among similar stocks. P/S Ratio (0.509) is also within normal values, averaging (2.867).
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 89 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CPRI’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 85, placing this stock worse than average.
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General Information
a retailer of men and women clothes, sportswear, accessories, footwear and apparel
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