Gross profit was $522 million with a 61 percent margin, down slightly from last year's 62.3 percent due to tariff-related headwinds.
US fashion house Capri Holdings expects FY26 revenue of $3.38 to $3.45 billion, operating income of $100 million and earnings per share of $1.20 to $1.40, supported by Michael Kors' high single-digit margin and Jimmy Choo's modest loss. For Q3FY26, revenue is projected between $975 million and $1 billion, with an operating margin of 7-8 percent and EPS of $0.7-0.8, reflecting gradual improvement across all major brands.
The company posted an operating loss of $12 million, resulting in an operating margin of –1.4 percent, while the adjusted operating margin stood at 2.3 percent. Net loss amounted to $34 million, or $0.28 per diluted share, compared with a profit of $42 million a year earlier. Adjusted net loss was $4 million, or $0.03 per diluted share, affected by a higher-than-expected effective tax rate, Capri Holdings said in a news release.
Brand-wise, Michael Kors' revenue declined 1.8 percent to $725 million, and constant currency revenue fell 3.3 percent. Gross margin fell to 59.3 percent, while operating income fell to $73 million (10.1 percent margin) from $87 million last year.
Jimmy Choo reported a 6.4 percent decline in revenue to $131 million (a 9.3 percent decline in constant currency). Gross margin rose to 70.2 percent, but the operating loss widened to $9 million, reflecting weaker sales momentum.
“We are encouraged by our second quarter results. Trends continued to improve sequentially, resulting in revenue, gross margin and operating income exceeding our expectations. This performance demonstrates the progress we are making as we execute our strategic initiatives to energize our luxury fashion houses,” he said John D Idol, President and CEO of Capri Holdings.
“With the Versace sale expected to close in our fiscal third quarter, we are now fully focused on the growth of our two iconic brands, Michael Kors and Jimmy Choo,” Idol added. “We plan to use the proceeds from the sale to pay down the majority of our debt, substantially strengthening our balance sheet and providing greater financial flexibility to both invest in our growth and return capital to shareholders in the future.”
“Given the encouraging signs of stabilization across our business and our planned reduction in debt levels, our Board of Directors has authorized a new $1 billion share repurchase program that the company expects to begin implementing in fiscal 2027,” Idol continued.
For the full FY26, Capri Holdings expects total revenue between $3.375 billion and $3.45 billion, with operating income around $100 million and net interest income ranging between $85 million and $95 million.
The company anticipates an effective tax rate in the mid-teens, weighted average diluted shares of around 120 million, and diluted earnings per share (EPS) between $1.2 and $1.4. Capital expenditures are projected to total approximately $110 million. For its brands, Michael Kors is expected to generate revenue of between $2.8 billion and $2.875 billion in FY26, with an operating margin in the high single-digit range, while Jimmy Choo is expected to generate between $565 million and $575 million in revenue and a negative operating margin in the mid-single digits.
For the third quarter (Q3) of FY26, Capri Holdings projects revenue of between $975 million and $1 billion, an operating margin of between 7 percent and 8 percent and net interest income of about $20 million. The effective tax rate is expected to be in the low to mid-single digit range, with diluted shares outstanding of approximately 120 million and diluted EPS between $0.70 and $0.80. Michael Kors is expected to post revenue of $825 million to $845 million with an operating margin in the low-to-teens range, while Jimmy Choo anticipates revenue of $150 million to $155 million and an operating margin in the low- to mid-single-digit negative range.
“We continue to expect retail trends to improve in the second half of fiscal 2026, which will position us for a return to growth in fiscal 2027. Longer term, we remain optimistic about the sustainable growth potential of both Michael Kors and Jimmy Choo,” Idol said.
Fiber2Fashion News Desk (SG)
