Capri posts lower Q1 sales, revises outlook
Capri Holdings sales dip in Q1 as revenue falls 3.5% to $769 million, but operating income rises to $17 million and the company revises its outlook, signaling c
Capri Holdings reported first‑quarter fiscal 2027 revenue of $769 million, a 3.5% decline from a year earlier, while operating income rose modestly to $17 million, beating its own guidance for the period.
Quarter results show mixed performance across brands
Revenue at Michael Kors fell 7.1% to $590 million, or 7.6% in constant‑currency terms. The drop was partially offset by about $10 million of wholesale shipments that arrived earlier than expected, a timing benefit that helped soften the headline decline.
In contrast, Jimmy Choo posted a 10.5% increase in revenue, reaching $179 million, or 9.3% at constant currency. The luxury footwear label’s growth contributed to the overall rise in operating margin, which improved to 2.2% from 2.0% a year ago.
Net income climbed to $69 million, translating to $0.60 per diluted share, up from $56 million and $0.47 per share in the comparable quarter.
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Outlook trimmed amid inventory and geopolitical pressures
The firm now projects full‑year revenue of roughly $3.4 billion, citing a $50 million hit from delayed Michael Kors inventory, another similar amount from weaker demand in Europe, the Middle East and Africa linked to ongoing conflict, and $35 million of currency‑related headwinds.
It expects operating income for the year to be about $170 million, with net interest and other income around $100 million and diluted earnings per share near $2.15. For the second quarter, revenue is forecast at $780 million and operating income near a comparable sum, reflecting the same inventory and regional challenges that slowed the first‑quarter results.
Capri’s guidance also assumes a 10% U.S. tariff through July 24, 2026, rising to a range of 10%‑12.5% thereafter. Management warned that changes in macroeconomic conditions, tariff rates or currency volatility could further affect outcomes.
John D. Idol, the chairman and chief executive, said, “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.”
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While the company has shed its Versace business, which was classified as discontinued operations after the April 2025 stock purchase agreement with Prada, the remaining portfolio still faces a mixed operating environment. The sale of Versace was completed in December 2025, and all related assets are now held for sale.
Looking ahead, the modest upside from Jimmy Choo’s growth may not be enough to fully offset the broader slowdown affecting Michael Kors and the EMEA region. If inventory delays persist and geopolitical tensions continue to suppress demand, Capri could see further pressure on its top line, a scenario that would likely keep earnings near the low‑end of the current outlook.
Analysts will be watching the second‑quarter release closely, as it will reveal whether the early‑shipment boost seen in the first quarter can be replicated or if revenue guidance needs further adjustment.
