Capri Holdings (CPRI) Earnings Date & Reports

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.
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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, Capri 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.

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.

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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.

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.

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