American fashion company Capri Holdings Limited has returned to near break-even profitability in the fourth quarter (Q4) of fiscal 2026 (FY26), supported by improving performance at Michael Kors and early traction from strategic initiatives aimed at reviving growth across its luxury portfolio.
The company also projected low-single-digit revenue growth and around 40 per cent adjusted earnings per share (EPS) growth for fiscal 2027 (FY27) despite ongoing tariff and macroeconomic pressures.
For FY27, Capri expects total revenue of around $3.525 billion and operating income of approximately $190 million. The company forecast diluted EPS of about $2.15 and expects capital expenditure (capex) of approximately $125 million.
Michael Kors is projected to generate revenue of around $2.9 billion with operating margin in the low-double-digit range, while Jimmy Choo is expected to post revenue of about $625 million with operating margin in the low-single-digit range.
“In longer term we expect to grow Michael Kors revenue to $4 billion and Jimmy Choo revenue to $800 million while significantly increasing profitability. With a strengthened foundation and clear strategic priorities, we are well positioned to accelerate growth, enhance profitability and deliver sustainable long-term value for our shareholders,” said John D Idol, chairman and chief executive officer (CEO) of Capri Holdings.
For Q1 FY27, Capri expects revenue of approximately $750 million and diluted EPS of around $0.40.
Revenue declines, margins improve in Q4 FY26
Meanwhile, the company reported total revenue of $796 million in Q4 ended March 28, 2026, down 3.7 per cent year on year (YoY) on a reported basis. Gross profit increased to $516 million from $495 million a year earlier, while gross margin improved sharply to 64.8 per cent from 59.9 per cent.
Idol noted that the company’s turnaround efforts introduced last year were beginning to show results across Michael Kors and Jimmy Choo.
Q4 results included a $40 million reduction in cost of goods sold linked to an estimated receivable for refunds under the US International Emergency Economic Powers Act (IEEPA) tariffs paid during fiscal 2026, Capri Holdings said in press release.
Operating loss narrowed to $27 million from $57 million in the prior-year quarter, with operating margin improving to negative 3.4 per cent from negative 6.9 per cent. On an adjusted basis, operating loss narrowed to $1 million compared to $15 million last year.
Net loss for the quarter was nearly flat at $(0.01) per diluted share compared to a net loss of $580 million, or $(4.90) per diluted share, in the same period last year. Adjusted net income stood at $27 million, or $0.22 per diluted share, against an adjusted net loss of $538 million, or $(4.55) per diluted share, in the prior-year period.
“Looking at fiscal 2026, we were encouraged by the progress we made executing against the strategic initiatives introduced last year to maximise the full potential of our two iconic fashion luxury houses, Michael Kors and Jimmy Choo. Throughout the year, we took deliberate actions to strengthen product innovation, brand desirability and consumer engagement and we see clear evidence that these efforts are resonating with consumers,” added Idol.
“Early validation of our strategic initiatives and improving trends across both brands reinforce our confidence in their return to revenue and earnings growth,” he said.
Michael Kors revenue declines despite margin improvement
Michael Kors remained Capri’s largest business, generating Q4 revenue of $656 million, down 5.5 per cent YoY. The gross margin improved to 64.6 per cent from 58.6 per cent, aided by a $38 million tariff-related reduction in cost of goods sold. Operating income rose to $57 million from $32 million, while operating margin improved to 8.7 per cent from 4.6 per cent.
Jimmy Choo posted revenue growth during the quarter, with sales rising 5.3 per cent YoY to $140 million. Gross margin slightly declined to 65.7 per cent from 66.2 per cent. The brand reported an operating loss of $20 million compared to a loss of $10 million in the prior-year quarter.
Fibre2Fashion News Desk (SG)
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