Capri Holdings Limited reported fiscal third‑quarter 2026 results that beat consensus estimates, with total revenue of $1.025 billion—down 4 % from the same period a year earlier—while adjusted earnings per share rose to $0.81, a $0.04 (≈5 %) beat over the $0.77 consensus. The company’s gross margin contracted to 60.8 % from 63.1 % year‑over‑year, largely because higher‑than‑expected tariff costs increased the cost of goods sold.
Michael Kors, Capri’s largest brand, generated $858 million in revenue, a 5.6 % decline driven by softer demand in the U.S. and European markets and a shift toward lower‑priced product lines. In contrast, Jimmy Choo posted $167 million in revenue, up 5 % as the brand leveraged its premium positioning and expanded in Asia, offsetting the Michael Kors weakness and contributing to the overall earnings beat.
Gross‑margin compression was offset by disciplined cost management, allowing adjusted EPS to rise despite a 1.4‑percentage‑point drop in operating margin to 7.7 % from 9.1 % a year earlier. The margin squeeze was primarily due to tariff‑related cost increases and significant capital outlays for brand repositioning and store renovations, which management said are investments that will strengthen long‑term profitability.
The company’s balance sheet improved markedly: net debt fell to $80 million from $1.17 billion a year earlier, a result of the December 2, 2025 sale of Versace to Prada. Free cash flow reached $252 million, and inventory decreased 6.5 % year‑over‑year, reflecting tighter working‑capital management and a more efficient supply chain.
Capri guided for full‑year 2026 revenue of $3.45 billion to $3.475 billion, slightly below consensus, and adjusted EPS of $1.30 to $1.40, an upward revision from prior guidance. CEO John D. Idol emphasized confidence in a return to growth in fiscal 2027, citing the debt‑reduction strategy and continued focus on core brands as key drivers of future performance.
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