Dec 2, 2025 5:00 AM Eastern Standard Time Capri Holdings Completes Sale of Versace Share LONDON--(BUSINESS WIRE)--Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced that it has completed the previously announced sale of Versace to Prada S.p.A. (HKSE:1913) for $1.375 billion in cash subject to certain adjustments. Mr. Idol concluded, "I would like to express my gratitude to the entire Versace team for their dedication and contributions. In particular I would like to recognize ...

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Revenue Performance - Total revenue for Michael Kors decreased to $725 million in Q3 2025 from $738 million in Q3 2024, representing a decline of 1.8%[156] - Total revenue for Jimmy Choo decreased to $131 million in Q3 2025 from $140 million in Q3 2024, representing a decline of 6.4%[156] - Total revenue for the company decreased to $856 million in Q3 2025 from $878 million in Q3 2024, representing a decline of 2.5%[156] - Total revenue decreased by $22 million, or 2.5%, to $856 million for the three months ended September 27, 2025, compared to $878 million for the same period in 2024[162] - Michael Kors revenue decreased by $13 million, or 1.8%, to $725 million, while Jimmy Choo revenue decreased by $9 million, or 6.4%[163] - Total revenue decreased by $73 million, or 4.2%, to $1.653 billion for the six months ended September 27, 2025, compared to $1.726 billion for the same period in 2024[182] - Michael Kors revenue decreased by $53 million, or 3.8%, to $1.360 billion for the six months ended September 27, 2025, while Jimmy Choo revenue decreased by $20 million, or 6.4%, to $293 million[186] Operating Performance - The company reported a loss from operations of $12 million in Q3 2025 compared to a loss of $6 million in Q3 2024[156] - The company experienced a significant loss from operations of $12 million for the three months ended September 27, 2025, compared to a loss of $6 million in the prior year[161] - Loss from operations was $12 million for the three months ended September 27, 2025, compared to a loss of $6 million for the same period in 2024, representing a 100% increase in loss[172] - Michael Kors recorded income from operations of $136 million for the six months ended September 27, 2025, down from $162 million in the prior year, with an operating margin decrease from 11.5% to 10.0%[197] Expenses - Cost of goods sold for Michael Kors increased to $295 million in Q3 2025 from $287 million in Q3 2024, an increase of 2.8%[156] - Selling, general and administrative expenses for Michael Kors decreased to $339 million in Q3 2025 from $344 million in Q3 2024, a decrease of 1.5%[156] - Total operating expenses decreased by $19 million, or 3.4%, to $534 million, representing 62.4% of total revenue[165] - Selling, general and administrative expenses decreased by $16 million, or 3.2%, to $481 million, accounting for 56.2% of total revenue[167] - Total operating expenses decreased by $57 million, or 5.3%, to $1.020 billion for the six months ended September 27, 2025, with a decrease in operating expenses as a percentage of total revenue from 62.4% to 61.7%[184] - Selling, general and administrative expenses decreased by $52 million, or 5.3%, to $936 million for the six months ended September 27, 2025, compared to $988 million for the same period in 2024[188] Profitability - Gross profit decreased by $25 million, or 4.6%, to $522 million, with a gross profit margin of 61.0% for the three months ended September 27, 2025[164] - Gross profit decreased by $58 million, or 5.4%, to $1.024 billion for the six months ended September 27, 2025, with gross profit margin at 61.9% compared to 62.7% in the prior year[183] - Michael Kors operating margin decreased from 11.8% to 10.1% for the three months ended September 27, 2025, while Jimmy Choo's operating margin worsened from a loss of 3.6% to 6.9%[176] Asset Impairment - Impairment of assets during the three months ended September 27, 2025, was $21 million, compared to $20 million in the same period last year[156] - Asset impairment charges recognized were $21 million for the three months ended September 27, 2025, compared to $20 million for the same period in 2024[169] - The company recognized asset impairment charges of $21 million for the six months ended September 27, 2025, compared to $20 million for the same period in 2024[190] Macroeconomic Factors - The company is facing macroeconomic conditions and inflationary pressures that are likely to impact consumer spending on luxury items[148] - The U.S. Government announced tariffs on imports from select countries, which could materially impact revenue and profitability[149] - The company anticipates continued challenges in demand for certain categories of fashion luxury goods, particularly in EMEA and Asia[163] Store Operations - The total number of retail stores decreased from 981 in 2024 to 907 in 2025, with a notable reduction in full-price retail stores[157] - The Americas region had 264 Michael Kors stores and 41 Jimmy Choo stores as of September 27, 2025[157] Cash Flow and Financing - Cash used in operating activities was $13 million for the six months ended September 27, 2025, compared to cash provided of $138 million for the same period in 2024[204] - Net cash provided by financing activities was $187 million during the six months ended September 27, 2025, compared to net cash used of $67 million in the prior year[206] - The company had cash and cash equivalents of $120 million as of September 27, 2025, up from $107 million as of March 29, 2025[203] Debt and Commitments - As of September 27, 2025, the company has $1.024 billion in borrowings outstanding under its 2022 Credit Facility and $724 million under its 2025 Term Loans[221] - The company has multiple fixed to fixed cross-currency swap agreements with an aggregate notional amount of $3.5 billion to hedge its net investment in CHF denominated subsidiaries[218] - The company recorded off-balance sheet commitments of $30 million related to outstanding letters of credit as of September 27, 2025[213] - The company has $30 million in off-balance sheet commitments related to letters of credit, with $29 million issued outside of the 2025 Credit Facilities[213] - The company is exposed to interest rate risk related to borrowings under its various credit facilities, with interest rates tied to different benchmarks[220] - The company has 17 financial institutions participating in its 2025 Credit Facilities, with no institution maintaining a maximum commitment percentage in excess of 10%[208]

Core Insights - Capri Holdings Limited (CPRI) reported a decline in top-line revenue year over year but exceeded the Zacks Consensus Estimate, while the bottom line decreased and missed consensus estimates [1][10] - The company is focused on growth through its core brands and aims to enhance profitability and reduce debt following the expected closure of the Versace sale-off [2][3] Financial Performance - CPRI posted an adjusted quarterly loss of $0.03 per share, missing the Zacks Consensus Estimate of $0.14, and down from adjusted earnings of $0.64 per share in the prior year [4][10] - Total revenues were $856 million, a decrease of 2.5% year over year, but above the Zacks Consensus Estimate of $830 million; on a constant-currency basis, revenues fell by 4.2% [5][10] - Gross profit decreased by 4.6% year over year to $522 million, with a gross margin decline of 130 basis points to 61% [5][6] Segment Performance - Michael Kors revenues declined by 1.8% year over year to $725 million, surpassing the Zacks Consensus Estimate of $697.2 million; gross profit fell to $430 million, with a gross margin contraction of 180 basis points to 59.3% [7] - Jimmy Choo's revenues were $131 million, down 6.4% year over year, missing the Zacks Consensus Estimate of $132.8 million; gross profit slightly decreased to $92 million, but gross margin expanded to 70.2% [8] Strategic Initiatives - The company plans to utilize proceeds from the Versace sale-off to improve financial flexibility and support a newly authorized $1 billion share repurchase program expected to begin in fiscal 2027 [3][12] - Capri Holdings anticipates improving retail trends in the second half of fiscal 2026, positioning itself for a return to growth in fiscal 2027 [3] Future Outlook - For the third quarter of fiscal 2026, Capri Holdings expects total revenues between $975 million and $1 billion, with an operating margin of 7-8% and earnings per share between $0.70 and $0.80 [15] - For fiscal 2026, total revenues are projected to be between $3.375 billion and $3.45 billion, with an expected operating income of $100 million and earnings per share of $1.20 to $1.40 [17][18]

Core Insights - Capri Holdings reported an unexpected quarterly loss and warned of potential margin impacts due to tariffs amid rising economic uncertainty affecting consumer sentiment and retail operations [1][2] - The company anticipates an unmitigated tariff impact of approximately $85 million in fiscal 2026 [1] Financial Performance - Capri's quarterly gross margin decreased to 61% from 62.3%, primarily due to a 130-basis-point negative impact from tariffs [3] - The company posted a quarterly adjusted loss of 3 cents per share, contrasting with Wall Street estimates of a profit of 13 cents per share [3] - Quarterly revenue reached $856 million, surpassing estimates of $825.7 million [5] Brand Performance - Revenue for the Michael Kors brand declined by 1.8% on a reported basis, an improvement from a 5.9% decline in the previous quarter [4] - Capri's turnaround efforts included the sale of its struggling Versace label to Prada earlier this year [4] Market Outlook - CEO John Idol projected a gross margin decline of 200 to 250 basis points for Q3, attributing this to higher inventory costs due to full tariffs [2] - Analyst Rachel Wolff noted that while Capri's earnings indicate some recovery in the luxury industry, demand remains uncertain due to economic turbulence affecting consumer sentiment [4]

Core Viewpoint - Capri Holdings (CPRI) has experienced a bearish trend recently, losing 8.1% over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, with selling pressure likely subsiding, which could lead to a bullish trend for the stock [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, signaling that bears may be losing control and bulls are starting to gain traction [4][5]. - This pattern can occur across various timeframes and is utilized by both short-term and long-term investors [5]. Fundamental Analysis - There is a strong consensus among Wall Street analysts to raise earnings estimates for Capri Holdings, which supports the bullish case for the stock [2][7]. - Over the last 30 days, the consensus EPS estimate for the current year has increased by 1.5%, indicating that analysts expect better earnings than previously predicted [8]. - Capri Holdings currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10]. Conclusion - The combination of the hammer chart pattern and positive earnings estimate revisions suggests that Capri Holdings may be on the verge of a trend reversal, making it a stock to watch for potential investment opportunities [1][7][10].

Financial Data and Key Metrics Changes - Total company revenue decreased 2.5% year-over-year to $856 million, with a 4.2% decline in constant currency [20][22] - Gross margin declined 130 basis points to 61%, primarily due to higher tariff rates impacting margins by approximately 120 basis points [22][23] - Operating margin decreased to 2.3% from 4.2% year-over-year [23] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased 2% year-over-year, with retail sales showing signs of momentum and positive comps in the full-price channel [6][21] - Jimmy Choo revenue decreased 6% year-over-year, with retail sales improving sequentially but wholesale revenue declining mid-teens due to shipment timing [14][22] Market Data and Key Metrics Changes - Revenue in the Americas decreased 7%, while EMEA increased 1% and Asia increased 12% [21] - Michael Kors saw a 25% increase in revenue in Asia, driven by higher wholesale shipments [21] Company Strategy and Development Direction - The company is focused on the growth of Michael Kors and Jimmy Choo following the expected closure of the Versace sale, with plans to use proceeds to reduce debt and enhance financial flexibility [4][26] - A new $1 billion share repurchase program has been authorized, expected to begin in fiscal 2027 [4][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilization and recovery in the business, with expectations for improved retail trends in the second half of fiscal 2026 [5][29] - The company anticipates returning to revenue and earnings growth in fiscal 2027, with gross margin expansion expected as tariff impacts are mitigated [29] Other Important Information - The company plans to invest approximately $350 million over the next three years for store renovations, aiming to enhance the luxury retail experience [12][26] - Inventory at quarter-end totaled $766 million, a 2.8% decline year-over-year [24] Q&A Session Summary Question: Can you speak to global reception for Michael Kors full-price retail repositioning? - Management noted stabilization in Michael Kors business, with positive consumer response to strategic initiatives and full-price comps turning positive [31][32] Question: What is the profile of the consumer engaging in North America? - Management indicated that Gen Z consumers are more price-sensitive, and strategic pricing architecture is helping attract them [40][41] Question: What are the expectations for revenue by geography in the back half? - Management stated that Europe is the best-performing region, with continued strong performance anticipated, while North America is expected to improve gradually [55][56]

Core Insights - Capri Holdings reported a quarterly loss of $0.03 per share, significantly missing the Zacks Consensus Estimate of $0.14, and down from earnings of $0.65 per share a year ago, representing an earnings surprise of -121.43% [1] - The company posted revenues of $856 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.14%, but down from $1.08 billion in the same quarter last year [2] - Capri Holdings has surpassed consensus revenue estimates four times over the last four quarters, although it has only beaten EPS estimates once in the same timeframe [2] Financial Performance - The stock has underperformed the market, losing about 1.6% since the beginning of the year, while the S&P 500 has gained 16.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $1.01 billion, and for the current fiscal year, it is $1.36 on revenues of $3.43 billion [7] Industry Outlook - The Retail - Apparel and Shoes industry, to which Capri Holdings belongs, is currently ranked in the top 15% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Capri Holdings' stock performance [5][6]

• Substantially reduce debt levels • Invest in future growth • Reinstate a share repurchase program in the future SECOND QUARTER FISCAL 2026 HIGHLIGHTS 2Q Fiscal Year 2026 Earnings Presentation November 4, 2025 VERSACE SALE As previously announced, Capri Holdings entered into a definitive agreement to sell Versace to Prada for $1.375B in cash subject to certain adjustments. The transaction is expected to close in our fiscal third quarter, subject to customary closing conditions including regulatory approval ...

Financial Performance - Total revenue for the second quarter of Fiscal 2026 was $856 million, a decrease of 2.5% on a reported basis and 4.2% in constant currency[10]. - The company reported a net loss of $34 million, or $(0.28) per diluted share, compared to net income of $42 million, or $0.37 per diluted share, in the prior year[10]. - Total revenue for the three months ended September 27, 2025, was $856 million, a decrease of 2.5% compared to $878 million for the same period in 2024[30]. - Net loss attributable to Capri for the three months ended September 27, 2025, was $28 million, compared to a net income of $24 million for the same period in 2024[30]. - Total revenue for Michael Kors decreased by 1.8% to $725 million in Q3 2025 compared to $738 million in Q3 2024[36]. - Total revenue for Jimmy Choo declined by 6.4% to $131 million in Q3 2025 from $140 million in Q3 2024[36]. - The company's total revenue for the first half of 2025 was $1.65 billion, representing a 4.2% decline from $1.73 billion in the first half of 2024[36]. - For the first half of 2025, Michael Kors revenue was $1.36 billion, a decrease of 3.8% from $1.41 billion in the same period of 2024[36]. - Jimmy Choo's revenue for the first half of 2025 was $293 million, down 6.4% from $313 million in the first half of 2024[36]. Gross Profit and Margins - Gross profit was $522 million with a gross margin of 61.0%, down from $547 million and 62.3% in the prior year, impacted by tariffs which negatively affected the gross margin by approximately 130 basis points[10]. - Operating margin for Michael Kors was 10.1% for the three months ended September 27, 2025, compared to 11.8% in the same period last year[32]. - The adjusted operating margin for Q3 2025 was 2.3%, compared to 4.2% in Q3 2024[38]. Cash Flow and Assets - Cash flow used in operating activities for the second quarter was $33 million, resulting in free cash flow of $(46) million[10]. - Total current assets increased to $1,705 million as of September 27, 2025, compared to $1,667 million as of September 28, 2024[28]. Liabilities and Debt Management - Total liabilities increased to $5,687 million as of September 27, 2025, compared to $5,306 million as of September 28, 2024[28]. - The company plans to use proceeds from the Versace sale, expected to close in the fiscal third quarter, to repay the majority of its debt, enhancing financial flexibility[4]. Shareholder Returns - Capri Holdings announced a new $1 billion share repurchase program, expected to begin in fiscal 2027, aimed at strengthening the balance sheet and returning capital to shareholders[4][13]. Store Count and Operational Changes - The number of retail stores decreased to 907 as of September 27, 2025, down from 981 stores as of September 28, 2024[34]. - The Capri transformation program aims to enhance operational effectiveness and digital capabilities across brands[38]. Adjustments and Costs - The company incurred $32 million in total adjustments for Q3 2025, including impairment charges and restructuring costs[38].