Capri Holdings Limited Announces Second Quarter Fiscal 2026 Results

Core Insights - Capri Holdings Limited reported second quarter results for Fiscal 2026, with revenue, gross margin, and operating income exceeding expectations, indicating positive trends in the luxury fashion market [1][2] - The company announced a $1 billion share repurchase program, expected to begin in Fiscal 2027, aimed at strengthening its balance sheet and returning capital to shareholders [2][10] - The sale of Versace to Prada for $1.375 billion is anticipated to close in the third quarter of Fiscal 2026, allowing Capri to focus on growth for its remaining brands, Michael Kors and Jimmy Choo [2][4] Financial Performance - Total revenue for the second quarter was $856 million, a decrease of 2.5% year-over-year, and a 4.2% decline on a constant currency basis [12][30] - Gross profit was $522 million, with a gross margin of 61.0%, down from 62.3% in the prior year, impacted by tariffs [12][30] - The company reported a net loss of $34 million, or $(0.28) per diluted share, compared to a net income of $42 million, or $0.37 per diluted share, in the previous year [12][30] Segment Performance - Michael Kors generated revenue of $725 million, a decrease of 1.8% on a reported basis and 3.3% in constant currency [12][30] - Jimmy Choo's revenue was $131 million, down 6.4% on a reported basis and 9.3% in constant currency [12][30] - The operating margin for Michael Kors was 10.1%, while Jimmy Choo reported an operating loss margin of (6.9)% [12][30] Outlook and Strategic Initiatives - The company expects retail trends to improve in the latter half of Fiscal 2026, positioning it for growth in Fiscal 2027 [2][11] - Capri Holdings aims to utilize proceeds from the Versace sale to reduce debt significantly, enhancing financial flexibility for future investments [2][4] - Long-term growth potential for Michael Kors and Jimmy Choo remains optimistic, with strategic initiatives in place to energize these brands [2][11]