Capri (US:CPRI) ZACKSยท2025-08-06 18:55Core Insights - Capri Holdings Limited (CPRI) reported a decline in total revenues but an increase in earnings for the first quarter of fiscal 2026, with results surpassing the Zacks Consensus Estimate [1][2][8] Financial Performance - Adjusted earnings per share for the quarter were 50 cents, significantly higher than the Zacks Consensus Estimate of 13 cents and up from 16 cents in the same quarter last year, driven by improved margins and cost control [2][8] - Total revenues amounted to $797 million, beating the Zacks Consensus Estimate of $774 million, but reflecting a 6% year-over-year decline on a reported basis and a 7.7% decline on a constant-currency basis [3][8] - Gross profit decreased by 6.2% year over year to $502 million, with a slight decrease in gross margin by 10 basis points to 63% [3] - Adjusted operating income was reported at $20 million, down from $31 million in the prior-year quarter, with an adjusted operating margin contracting 120 basis points to 2.5% [4] Segment Performance - Revenues from Michael Kors decreased by 5.9% year over year to $635 million, surpassing the Zacks Consensus Estimate of $622.5 million, with gross profit declining to $388 million and gross margin contracting by 100 basis points to 61.1% [5] - Jimmy Choo's revenues were $162 million, a 6.4% decrease on a reported basis, but above the Zacks Consensus Estimate of $153.5 million, with gross profit slightly down to $114 million and gross margin expanding by 330 basis points to 70.4% [6] Financial Health - As of the end of the quarter, Capri Holdings had cash and cash equivalents of $129 million, long-term debt of $1.65 billion, and total shareholders' equity of negative $13 million [7] - The operating cash flow for the first quarter was $20 million, while free cash flow totaled $7 million [7] Strategic Developments - Capri Holdings is in the process of selling Versace to Prada S.p.A. for $1.375 billion, with the transaction expected to close in the second half of calendar 2025 [8] - The company aims to stabilize performance and drive growth by fiscal 2027, focusing on strengthening the Michael Kors and Jimmy Choo brands [1][8] Outlook - For the second quarter of fiscal 2026, Capri Holdings expects total revenues between $815 million and $835 million, with projected earnings per share between 10 cents and 15 cents [12] - For the full fiscal 2026, total revenues are anticipated to be in the range of $3.375 billion to $3.45 billion, with earnings per share expected between $1.20 and $1.40 [14][15]