Capri Holdings (CPRI) Q3 2026 earnings summary

Executive summary

• Revenue and EPS for the quarter exceeded expectations, despite a 4.0% year-over-year revenue decline, with Michael Kors declining and Jimmy Choo growing modestly.

• Net debt was reduced to $80 million at quarter end, following the completed sale of Versace, which generated proceeds of $1.365 billion.

• Adjusted EPS rose 30% to $0.81, and net income from continuing operations increased sharply, reflecting operational improvements and cost controls.

• Strategic initiatives and the Versace sale strengthened financial flexibility and positioned the company for long-term growth, with a focus on Michael Kors and Jimmy Choo.

• The previously proposed merger with Tapestry was terminated, with a $45 million reimbursement received for related expenses.

Financial highlights

• Total revenue was $1.025 billion, down 4% year-over-year; gross margin was 60.8%, with underlying margin improvement offset by higher tariffs.

• Adjusted operating margin was 7.7%; operating income was $46 million, and adjusted operating income was $79 million.

• Net income from continuing operations was $57 million; adjusted net income was $98 million.

• Inventory was $663 million, down 6.5% year-over-year; cash and equivalents totaled $154 million.

• Net debt reduced from $1.6 billion to $80 million after Versace sale.

Outlook and guidance

• Fiscal 2026 revenue expected at $3.45–$3.475 billion; Michael Kors $2.86–$2.875 billion, Jimmy Choo $590–$600 million.

• Gross margin anticipated at ~61%; operating income around $100 million; diluted EPS forecasted at $1.30–$1.40.

• Capital expenditures planned at $100 million, focused on store renovations and digital enhancements.

• Return to revenue and earnings growth expected in fiscal 2027, with gross margin expansion driven by full price sell-throughs, sourcing efficiencies, and price increases.

• Guidance excludes potential impacts from macroeconomic volatility, tariffs, inflation, and currency fluctuations.