Before the market opened on August 5, US fashion luxury group Capri Holdings Limited announced its financial results for the first quarter of fiscal 2027 ended June 27. Revenue fell 3.5% year-on-year to $769 million, or 4.1% in constant currency, while operating income was $17 million, representing an operating margin of 2.2%, and net income attributable to Capri was $69 million.
Revenue at both Michael Kors and Jimmy Choo exceeded expectations during the quarter. Michael Kors revenue declined 7.1% year-on-year to $590 million, while wholesale sell-through returned to positive growth, driven by double-digit growth in accessories. Jimmy Choo revenue increased 10.5% year-on-year to $179 million, with broad-based growth across all channels, regions and product categories.
During the earnings call following the results, Capri Holdings Chairman and Chief Executive Officer John D. Idol noted that Michael Kors continued to record positive full-price comparable store sales growth in China, with further improvement expected in the second half of the fiscal year.
Commenting on the Group’s overall first-quarter performance, John D. Idol said that “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.
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. As a result, we now expect fiscal 2027 revenue of approximately $3.4 billion.”
During the first quarter, Capri Holdings repurchased approximately 2.6 million ordinary shares for $50 million in open-market transactions, at an average price of approximately $19.31 per share.
At the close of trading on the day the results were released, Capri Holdings shares fell 3.03% from the previous trading day to $16.02 per share. The stock has declined approximately 23% over the past year, with the Group’s latest market capitalisation standing at approximately $1.8 billion.
Key financial results for Capri Holdings’ first quarter of fiscal 2027 ended June 27:
- Revenue decreased 3.5% year-on-year to $769 million, or 4.1% in constant currency;
- Gross profit was $500 million, with gross margin of 65.0%, up 200 basis points year-on-year;
- Operating income was $17 million, with an operating margin of 2.2%; adjusted operating income was $28 million, with an adjusted operating margin of 3.6%;
- Net income attributable to Capri was $69 million, while adjusted net income attributable to Capri was $76 million;
- Diluted earnings per share were $0.60, while adjusted diluted earnings per share were $0.67;
- Free cash flow was $48 million;
- Net debt was $224 million.
– By brand
Michael Kors:
Revenue was $590 million, down 7.1% year-on-year, or 7.6% in constant currency;
Gross profit was $377 million, with gross margin of 63.9%, up 280 basis points year-on-year, primarily benefiting from improved full-price sales and lower tariff rates compared with the same period last year;
Operating income was $55 million, with an operating margin of 9.3%, down 60 basis points year-on-year, primarily due to lower revenue resulting in reduced fixed-cost leverage.
Jimmy Choo:
Revenue was $179 million, up 10.5% year-on-year, or 9.3% in constant currency;
Gross profit was $123 million, with gross margin of 68.7%, down 170 basis points year-on-year due to changes in channel mix;
Operating income was $13 million, with an operating margin of 7.3%, up 480 basis points year-on-year, benefiting from greater fixed-cost leverage as revenue increased.
– By region:
- Americas: revenue of $430 million, compared with $459 million in the same period last year;
- EMEA (Europe, the Middle East and Africa): revenue of $224 million, compared with $228 million in the same period last year;
- Asia: revenue of $115 million, compared with $110 million in the same period last year.
Fiscal 2027 second-quarter guidance:
- Capri Holdings expects second-quarter revenue of approximately $780 million, operating income of approximately $10 million and diluted earnings per share of approximately $0.20;
- Michael Kors expects second-quarter revenue of approximately $645 million, with an operating margin in the high-single-digit range;
- Jimmy Choo expects second-quarter revenue of approximately $135 million, with an operating margin in the negative mid-single-digit range.
Fiscal 2027 full-year guidance:
- Capri Holdings expects full-year revenue of approximately $3.4 billion, operating income of approximately $170 million and diluted earnings per share of approximately $2.15;
- Michael Kors expects full-year revenue of approximately $2.765 billion, with an operating margin in the low-double-digit range;
- Jimmy Choo expects full-year revenue of approximately $635 million, with an operating margin in the low-single-digit range.
| Source: Capri Holdings financial results
| Image Credit: Capri Holdings official website
| Editor: Luxeplace
