Capri Holdings Ltd (CPRI): Results of Operations and Financial Condition
Capri Holdings Ltd (CPRI) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Capri Holdings Limited Announces First Quarter Fiscal 2027 Results Revenue, Operating Income and Earnings Per Share Exceed Expectations London — August 5, 2026 — Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results
How this was made
The 30-second read
Why it matters
The key tradable items are the reported Q1 operating/margin and EPS beats versus expectations, the 20% YoY decline in net inventory, and the revised FY2027 revenue outlook to about $3.4B while maintaining adjusted EPS outlook around $2.15 via operating expense reductions.
Market read
This is a company-specific earnings and guidance update with explicit drivers (inventory timing, EMEA demand, FX) and tariff assumptions, which can drive near-term valuation changes.
What to watch
Michael Kors revenue decline includes about $10M from earlier-than-anticipated wholesale shipment timing, and net inventory fell 20%, which could reduce future discounting risk.
Revenue, Operating Income and Earnings Per Share Exceed Expectations
First-quarter profitability, gross margin and earnings per share improved from the prior year, but total revenue declined and the Company reduced its fiscal 2027 revenue outlook to approximately $3.4 billion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $769 million | – | decreased 3.5% |
| Total revenue constant currency changenon-GAAP | decreased 4.1% | – | decreased 4.1% |
| Gross profitGAAP | $500 million | – | – |
| Gross marginGAAP | 65.0% | – | 200 basis point increase |
| Income from operationsGAAP | $17 million | – | – |
| Operating marginGAAP | 2.2% | – | – |
| Adjusted income from operationsnon-GAAP | $28 million | – | – |
| Adjusted operating marginnon-GAAP | 3.6% | – | – |
| Net incomeGAAP | $69 million | – | – |
| Diluted earnings per shareGAAP | $0.60 per diluted share | – | – |
| Adjusted net incomenon-GAAP | $76 million | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $0.67 per diluted share | – | – |
| Net inventoryGAAP | $624 million | – | 20% decrease |
| Cash flow provided by operating activitiesGAAP | $73 million | – | – |
| Capital expendituresGAAP | $25 million | – | – |
| Free cash flownon-GAAP | $48 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Michael KorsApproximately $10 million of revenue was attributable to earlier than anticipated timing of wholesale shipments. | $590 million | – | decreased 7.1% |
| Jimmy ChooThe 480 basis point increase in operating margin was primarily due to expense leverage on higher revenue. | $179 million | – | increased 10.5% |
Fiscal Year 2027 Outlook outlook
- Revenueapproximately $3.4 billion
- Tax ratelow-teens range
- NoteOperating income of approximately $170 million
- NoteNet interest and other income of approximately $100 million
- NoteWeighted average diluted shares outstanding of approximately 110 million
- NoteDiluted earnings per share of approximately $2.15
- NoteMichael Kors total revenue of approximately $2.765 billion
- NoteMichael Kors operating margin in the low-double-digit range
- NoteJimmy Choo total revenue of approximately $635 million
- NoteJimmy Choo operating margin in the low-single-digit range
- NoteSecond Quarter Fiscal 2027: Total revenue of approximately $780 million
- NoteSecond Quarter Fiscal 2027: Operating income of approximately $10 million
- NoteSecond Quarter Fiscal 2027: Net interest and other income of approximately $25 million
- NoteSecond Quarter Fiscal 2027: Effective tax rate in the mid-30% range
- NoteSecond Quarter Fiscal 2027: Weighted average diluted shares outstanding of approximately 112 million
- NoteSecond Quarter Fiscal 2027: Diluted earnings per share of approximately $0.20
- NoteSecond Quarter Fiscal 2027: Michael Kors total revenue of approximately $645 million
- NoteSecond Quarter Fiscal 2027: Michael Kors operating margin in the high-single-digit range
- NoteSecond Quarter Fiscal 2027: Jimmy Choo total revenue of approximately $135 million
- NoteSecond Quarter Fiscal 2027: Jimmy Choo operating margin in the negative mid-single-digit range
Capital returns
- During the fiscal first quarter, the Company spent $50 million to repurchase approximately 2.6 million ordinary shares in open market transactions at an average cost of approximately $19.31 per share.
- As of June 27, 2026 the remaining availability under the Company's share repurchase program was $871 million.
What drove it
- The 200 basis point increase in total gross margin was primarily driven by higher full-price sell-throughs and lower tariff rates relative to the first quarter of fiscal 2026.
- Michael Kors gross margin increased 280 basis points, primarily driven by higher full-price sell-throughs and lower tariff rates relative to the first quarter of fiscal 2026.
- Jimmy Choo revenue increased 10.5%, while its operating margin increased 480 basis points primarily due to expense leverage on higher revenue.
- The Company completed the sale of its Versace business on December 2, 2025, and results presented relate only to continuing operations unless otherwise noted.
Concerns
- Total revenue decreased 3.5% on a reported basis and 4.1% in constant currency.
- Michael Kors revenue decreased 7.1%, or 7.6% on a constant currency basis.
- Michael Kors operating margin declined 60 basis points, primarily due to expense deleverage on lower revenue.
- Jimmy Choo gross margin decreased 170 basis points, primarily driven by channel mix.
- Fiscal 2027 revenue guidance is impacted by approximately $50 million from lower than anticipated second quarter revenue at Michael Kors due to inventory delays, $50 million from softer trends in EMEA due to the ongoing conflict in the Middle East and $35 million from foreign currency headwinds relative to the Company's prior expectation.
- Guidance assumes an incremental 10% tariff rate on imports into the United States through July 24, 2026 and 10% to 12.5% thereafter.
What to watch
- Michael Kors inventory delays and their approximately $50 million impact on second-quarter fiscal 2027 revenue guidance.
- Softer trends in EMEA and the effect of the ongoing conflict in the Middle East on fiscal 2027 revenue.
- Foreign currency headwinds, including the approximately $35 million impact relative to the Company's prior expectation for fiscal 2027.
- Whether Jimmy Choo continues to grow and returns to profitability as expected by the Company.
- Progress in reducing operating expenses to maintain the fiscal 2027 diluted earnings per share outlook of approximately $2.15.
Balance sheet and cash flow
- Net inventory as of June 27, 2026 was $624 million, a 20% decrease compared to the prior year.
- Cash flow provided by operating activities for the first quarter was $73 million.
- Capital expenditures were $25 million.
- Free cash flow of $48 million.
- Cash and cash equivalents totaled $114 million as of June 27, 2026.
- Total borrowings outstanding were $338 million as of June 27, 2026.
- Net debt of $224 million as of June 27, 2026 versus $1.5 billion as of June 28, 2025.
Analysis
Capri reported first-quarter fiscal 2027 revenue of $769 million, down 3.5% on a reported basis and down 4.1% in constant currency. The revenue decline was concentrated at Michael Kors, where revenue of $590 million decreased 7.1%. Jimmy Choo provided the offset, with revenue of $179 million increasing 10.5%. The Company also cited approximately $10 million of Michael Kors revenue attributable to earlier than anticipated timing of wholesale shipments.
Profitability improved despite lower total revenue. Gross profit was $500 million versus $502 million in the prior year, while gross margin increased to 65.0% from 63.0%. The Company attributed the 200 basis point gross-margin improvement to higher full-price sell-throughs and lower tariff rates relative to the first quarter of fiscal 2026. Income from operations was $17 million versus $16 million, and adjusted income from operations was $28 million versus $20 million. Adjusted operating margin rose to 3.6% from 2.5%.
Brand performance was uneven. Michael Kors gross margin rose to 63.9% from 61.1%, but operating income declined to $55 million from $63 million and operating margin declined to 9.3% from 9.9%, primarily because of expense deleverage on lower revenue. Jimmy Choo gross margin declined to 68.7% from 70.4% because of channel mix, but operating income increased to $13 million from $4 million and operating margin rose to 7.3% from 2.5% due to expense leverage on higher revenue.
Net income increased to $69 million, or $0.60 per diluted share, from $56 million, or $0.47 per diluted share. Adjusted net income increased to $76 million, or $0.67 per diluted share, from $60 million, or $0.50 per diluted share. Liquidity measures included $73 million of cash flow provided by operating activities, $25 million of capital expenditures and $48 million of free cash flow. Net debt was $224 million as of June 27, 2026 versus $1.5 billion as of June 28, 2025. The Company also spent $50 million on share repurchases during the quarter.
The fiscal 2027 outlook calls for total revenue of approximately $3.4 billion, operating income of approximately $170 million and diluted earnings per share of approximately $2.15, all on an adjusted, non-GAAP basis. The Company identified approximately $50 million from Michael Kors inventory delays, $50 million from softer EMEA trends and $35 million from foreign currency headwinds relative to its prior expectation as revenue impacts. For the second quarter, it expects total revenue of approximately $780 million and diluted earnings per share of approximately $0.20, with Michael Kors operating margin in the high-single-digit range and Jimmy Choo operating margin in the negative mid-single-digit range.
Management, verbatim
We are encouraged by our first quarter results, which exceeded our expectations and demonstrated the progress we are making to build a stronger and more profitable business. Our strategic initiatives across both Michael Kors and Jimmy Choo are driving deeper consumer engagement through enhanced brand storytelling and compelling product innovation.
John D. Idol, Chairman and Chief Executive Officer
As we look at the balance of fiscal 2027 we expect Jimmy Choo to continue to grow and return to profitability. At Michael Kors certain headwinds including lower than anticipated inventory levels in the second quarter, softer trends in EMEA and updated foreign currency exchange rate assumptions are impacting our revenue outlook.
John D. Idol, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported metrics
- Reported total revenue prior-year dollar amount
- Reported year-over-year changes for gross profit, operating income, net income and earnings per share
- Dividend declaration or dividend payment information
- Fiscal 2027 gross margin guidance
- Fiscal 2027 operating expense guidance
- Prior outlook figures for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Capri Holdings filed an 8-K with Exhibit 99.1 covering Q1 FY2027 results from continuing operations and updated FY2027 guidance, including assumptions for incremental US import tariffs and FX.
Ticker impact
Capri reported Q1 FY2027 results and revised FY2027 revenue to about $3.4B, citing inventory delays, EMEA softness, and FX headwinds.
Likely choppy-to-negative near term if investors focus on the revenue outlook reduction, with support if EPS $2.15 guidance and margin improvements hold.
The filing includes concrete quarterly datapoints (revenue, margins, EPS, net inventory, FCF) plus a specific full-year revenue expectation change and expense actions to protect EPS.
Market effects
Luxury apparel peers may see read-across on inventory normalization, tariff sensitivity, and EMEA demand trends.
EMEA softness is explicitly cited, which can influence regional luxury sentiment and inventory expectations.
Tariff and FX assumptions are embedded in guidance, reinforcing macro sensitivity for global retailers.
Counterpoint
Investors may underreact to the revenue cut if the company’s expense actions and gross margin expansion indicate earnings resilience through the tariff and FX cycle.
Key entities
- companyCapri Holdings Limited
Reports Q1 FY2027 results and revised FY2027 guidance, including revenue headwinds and EPS protection actions.
- business_segmentMichael Kors
Q1 revenue declined 7.1% (constant currency -7.6%) with margin expansion but operating margin down on expense deleverage.
- business_segmentJimmy Choo
Q1 revenue grew 10.5% (constant currency +9.3%) with operating margin improving to 7.3%.
- counterpartyPrada S.p.A.
Previously agreed to acquire Capri’s Versace subsidiaries; Versace sale completed Dec 2, 2025, leaving results in discontinued operations.
