Jimmy Choo owner Capri trims revenue but cuts net debt sharply

Core Viewpoint - Capri Holdings, owner of Jimmy Choo, reported lower third-quarter sales but exceeded earnings and free cash flow expectations due to a significant reduction in net debt [1][6] Financial Performance - Revenue from continuing operations decreased by 4% year on year to $1.025 billion, or 5.9% at constant currency [1] - Gross profit fell to $623 million, with a margin of 60.8%, down from $674 million and 63.1% previously [2] - Operating margin improved to 4.5% from 2.4%, and net income from continuing activities rose to $57 million from $6 million a year earlier [1][2] - Diluted earnings per share from continuing operations increased to $0.47 from $0.05, with adjusted diluted EPS rising to $0.81 from $0.63 [2] Cash Flow and Debt - Operating cash flow reached $271 million, generating $252 million in free cash flow after $19 million of capital expenditure [2] - Cash and cash equivalents totaled $154 million, with borrowings of $234 million, resulting in net debt of $80 million, down from $1.17 billion a year earlier [3] Brand Performance - Michael Kors reported revenue of $858 million, down 5.6% on a reported basis and 7.3% in constant currency, with an operating income of $119 million and a margin of 13.9% [3] - Jimmy Choo generated revenue of $167 million, up 5% reported and 1.9% in constant currency, with an operating profit of $3 million, recovering from a $6 million loss [3] Regional Sales - Americas sales declined to $646 million from $696 million, EMEA sales increased to $268 million from $256 million, and Asia sales slipped to $111 million from $116 million [4] Year-to-Date Performance - For the nine months ending December 27, 2025, Capri reported revenue of $2.67 billion, down from $2.79 billion in the prior year, with net income attributable to the group reaching $141 million after a $537 million loss previously [4] Future Guidance - Capri issued adjusted guidance for fiscal 2026, projecting revenue of approximately $3.45 billion to $3.475 billion from continuing operations [5] - For Michael Kors, anticipated revenue is around $2.86 billion to $2.87 billion with an operating margin in the high single digits, while Jimmy Choo is forecasted to generate $590 million to $600 million in sales with a negative low single-digit operating margin [5] Management Outlook - The company remains exposed to global macroeconomic conditions, potential tariff increases, inflation, weaker consumer sentiment, and currency fluctuations [6] - Capri Holdings' chairman and CEO expressed confidence in the third-quarter performance and the strategies in place to support a return to growth in fiscal 2027 [6]