Capri (CPRI) investor relations material

Executive summary

• Revenue declined 6% year-over-year to $797M, with EPS of $0.50, both exceeding expectations due to sequential improvement and strategic initiatives.

• Versace business classified as discontinued operations following a pending $1.375B sale to Prada, expected to close in the second half of 2025.

• Net income from continuing operations was $56M–$60M, up from prior year, driven by cost controls and a favorable tax benefit.

• Strategic initiatives include brand storytelling, influencer marketing, product innovation, and store renovations to drive growth and engagement.

• The previously proposed merger with Tapestry was terminated after regulatory challenges, with a $45M reimbursement received.

Financial highlights

• Gross margin was 63%, flat year-over-year; operating margin was 2.0% reported and 2.5% adjusted.

• Adjusted EPS from continuing operations was $0.50; reported EPS was $0.47.

• Operating expenses decreased by $22M–$36M due to cost reduction programs.

• Inventory increased 10.8% year-over-year, mainly from earlier receipts and FX/tariffs.

• Ended quarter with $129M cash and $1.67B debt; net debt ~$1.5B.

Outlook and guidance

• FY26 revenue expected between $3.375B and $3.45B; Michael Kors $2.8B–$2.875B, Jimmy Choo $565M–$575M.

• FY26 gross margin expected at 60.5%–61%; operating income around $100M.

• Diluted EPS for FY26 expected between $1.20 and $1.40.

• Guidance reflects higher tariffs, mid-teen effective tax rate, and ongoing macroeconomic and inflationary pressures.

• Sequential improvement anticipated in the back half of FY26; return to growth expected in FY27.