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Capri Holdings, owner of Michael Kors, Jimmy Choo and Versace (until its sale to Prada Group closes, expected in the second half of 2025) said revenues were down 7.7 per cent to $797 million for the first quarter of fiscal 2026, beating company and analyst expectations. The revenues do not include Versace.
“We are encouraged by our first-quarter results. Trends improved sequentially leading to both revenue and earnings per share that exceeded our expectations,” chair and CEO John D Idol said in his prepared remarks to investors on Wednesday. “This performance demonstrates the progress we are making as we execute against our strategic initiatives to energise our luxury fashion houses. While still early, we are beginning to see signs that our strategies are working.” Shares rose 8 per cent on Wednesday.
By brand, Michael Kors revenues fell 7.3 per cent to $635 million in Q1, while Jimmy Choo revenues fell 9.2 per cent to $162 million. Idol said the company is now focused on growing both brands. The company plans to use the proceeds from the Versace transaction to “substantially” decrease its debts, CFO Rajal Mehta said. “Post the deal closing, we expect to have minimal debt remaining on our balance sheet, and then as the business stabilises, we’ll look to reevaluate reinstating a share repurchase programme,” Mehta explained.
Idol detailed plans for Michael Kors, including increasing marketing expenses, informed by a robust consumer insight programme it’s had for the past two years. “We understand more about consumer intent around the brand and how [consumers are] engaging with the product,” he said. “We analyse sell-throughs, and we saw discounting grow because we were marking product down.” The company will now adopt a more stringent approach to discounting across Michael Kors and Jimmy Choo. Full-price new product sell-throughs are up double digits across the group, Idol added.
Idol also addressed design issues at Michael Kors, which he said drove the company to change its handbag designs. Owned retail stores saw an uplift in full-price sell-throughs, and wholesale is heading in the right direction, the CEO added.
Idol also confirmed to investors that Jimmy Choo is not for sale. “We do not have an intent on selling Jimmy Choo. In fact, we’re excited about the growth opportunity that Jimmy Choo represents for the company,” he said. This includes new bags at lower prices, from $995 to $595, though some designs will remain in the $1,000 to $2,000 range. “We think that there’s been a lot of very significant price increases in the upper end of luxury, and we think there’s customer resistance to that,” Idol said. “We want to use Jimmy Choo and try to have both.” The brand announced the imminent launch of its Curve bag, with Sydney Sweeney — who is still embroiled in the American Eagle ad controversy — in the campaign, which will fall into this lower price bracket.
By region, the Americas (which makes up 61 per cent of group sales) were down 9 per cent to $413 million; EMEA (26 per cent of group sales) was up 6 per cent to $150 million; and Asia (12 per cent of group sales) fell 15 per cent to $72 million.
Idol revealed that the company has seen $85 million in unmitigated tariff impact so far this year. “The results are a testament to the fact that the teams are doing a great job with cost reduction across the organisation,” he said, citing successes in store fleet optimisation, as well as a focus on reducing company costs further. “We feel strongly that we’re going to create leverage next year with revenue growth.”
Regarding the new levies, which go into effect on Thursday, Mehta said that the group’s sourcing is broadly diversified, with production locations including Cambodia, Vietnam and India for Michael Kors, and Italy for Jimmy Choo. “[Our] global supply chain is highly agile. We anticipate offsetting tariff impacts by 2027 by working with sourcing partners to create cost efficiencies, limiting exposure and price increases,” Mehta said. “Efforts to drive higher full-price sell-throughs will support this.”
Looking to the second quarter, Capri expects revenues of between $815 and $835 million. “We’re forecasting to be down approximately 250 to 300 basis points as we’ll see increased tariff impact, as well as the continued impacts of the pricing strategy that we previously spoke about,” Mehta added. “The higher tariff impact is going to continue throughout the quarters and throughout the year.”
Capri raised its full-year guidance slightly, upping its revenue guidance to between $3.38 and $3.45 billion (versus $3.3 to $3.4 billion previously). “We expect trends to improve in the back half of fiscal 2026 and to return to growth in fiscal 2027,” Idol told investors. “We remain optimistic about the sustainable growth potential of Michael Kors and Jimmy Choo.”
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