Capri Holding is trying to put the last year — including its sharp losses and declining sales — behind it and move forward in turnaround mode, sans Versace.
“Fiscal 2025 was a challenging year for Capri Holdings, but we are optimistic about our path forward as we enter fiscal 2026,” said John Idol, chairman and chief executive officer, in a statement regarding fiscal fourth-quarter results. “While there is uncertainty around the impact of tariffs on the global economic environment, we remain focused on executing against our new strategic initiatives that are designed to return Capri Holdings to future growth. The company is still in the early stages of its turnaround and we are seeing positive indicators that our strategies are beginning to work.”
Capri started the fiscal year with plans to be bought out by Tapestry Inc., only to see that exit fall apart and to pivot to a deal to sell Versace to Prada for $1.4 billion.
The company is now pressing forward with its largest business, Michael Kors, and Jimmy Choo, which sources have said also could be spun off, potentially to cofounder Tamara Mellon.
But it’s a tough backdrop to make a course correction against.
Capri’s fiscal fourth-quarter net losses expanded to $645 million, including a $545 million non-cash tax valuation allowance taken against deferred tax assets, $119 million of which was related to Versace. Losses tallied $472 million a year earlier.
Adjusted losses totaled $581 million and compared with income of $50 million a year ago.
Investors wanted more and traded shares of Capri down 4.6 percent to $16.75 in pre-market trading on Wednesday.
Revenues fell 15.4 percent to $1 billion for the quarter. By brand:
- Michael Kors’ revenues decreased 15.6 percent to $694 million.
- Jimmy Choo’s declined 2.9 percent to $133 million.
- Versace fell 21.2 percent to $208 million.
Despite the sharp decline in sales, Capri’s inventories were up 1 percent at the end of the quarter, reflecting $60 million of goods that were brought in earlier than planned in a sourcing landscape that’s been disrupted by President Donald Trump’s trade war.
“We continue to expect trends to improve throughout fiscal year 2026, positioning us to return to growth in fiscal 2027 and beyond,” Idol said. “We are confident in our ability to grow Michael Kors to $4 billion in revenue and Jimmy Choo to $800 million over time, while restoring operating margin to the double-digit range.”
This year, Capri expects its revenues to total $3.3 billion to $3.4 billion, with Michael Kors accounting for $2.75 billion to $2.85 billion of that.
That would mark some stabilization for Michael Kors, which logged sales of $3 billion last year and $3.5 billion a year before.
Capri said diluted earnings per share would rise to $1.20 to $1.40.
Simeon Siegel, an analyst at BMO, said: “There are clearly many puts/takes and margins disappointed, but we believe the most important points are management signaling troughing Michael Kors revenues, guiding EPS better just as the balance sheet is about to look dramatically cleaner” following the Versace sale.
