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Capri Holdings Q4 Earnings Fall Short of Estimates, Revenues Dip Y/Y
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Capri Holdings Limited (CPRI - Free Report) has posted drab fourth-quarter fiscal 2025 results, wherein the top and bottom lines declined year over year. Total revenues surpassed the Zacks Consensus Estimate, while earnings missed the same.
Capri Holdings’ fourth-quarter results reflect that the company is in the early stages of a strategic turnaround amid ongoing macroeconomic challenges. While fiscal 2025 proved difficult, Capri is beginning to see positive indicators that its new strategic initiatives are gaining traction.
A key highlight was the announced sale of the Versace brand to Prada Group, a move aimed at sharpening Capri’s focus, strengthening its balance sheet, reducing debt, and potentially reinstating share repurchases. Its performance is expected to improve throughout fiscal 2026, positioning the company for a return to growth in fiscal 2027 and beyond.
Capri Holdings Limited Price, Consensus and EPS Surprise
This designer, marketer, distributor and retailer of branded apparel and accessories posted an adjusted quarterly loss of $4.90 per share in the quarter under review. The reported figure was wider than the Zacks Consensus Estimate of a loss of 16 cents. Also, the bottom line declined significantly from adjusted earnings of 42 cents reported in the year-earlier quarter. This significant decline was primarily due to a non-cash tax valuation allowance charge.
Total revenues of $1,035 million surpassed the Zacks Consensus Estimate of $983 million but decreased 15.4% year over year on a reported basis and 14.1% on a constant-currency basis.
The gross profit decreased 17.7% year over year to $631 million. The gross margin contracted 170 basis points (bps) to 61%.
Capri Holdings reported an adjusted operating loss of $33 million, considerably down from adjusted operating earnings of $78 million in the prior-year quarter.
CPRI’s Q4 Revenue Insights by Segments
Revenues from Versace dipped 21.2% year over year to $208 million on a reported basis, 19.7% on a constant-currency basis. The brand’s gross profit decreased to $136 million from $171 million reported in the year-ago quarter. The gross margin contracted 60 basis points (bps) to 65.4%.
Jimmy Choo’s revenues were $133 million, a 2.9% decrease on a reported basis and a 1.5% constant-currency basis. The brand’s gross profit decreased to $88 million from $96 million reported in the year-ago quarter. The gross margin contracted 390 basis points (bps) to 66.2%.
Revenues from Michael Kors were $694 million, which marked a decrease of 15.6% on a reported basis and 14.4% at constant currency from the prior-year period. The brand’s gross profit decreased to $407 million from $500 million reported in the year-ago quarter. The gross margin contracted 220 basis points (bps) to 58.6%.
Capri Holdings’ Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $166 million, long-term debt of $1.48 billion and total shareholders’ equity, including non-controlling interest, of $372 million. The operating cash flow for fiscal 2025 was $281 million, whereas the free cash flow totaled $153 million.
As of March 29, 2025, CPRI had 1,158 retail stores. These include 711 Michael Kors, 219 Jimmy Choo and 228 Versace stores.
Other Developments
As previously announced, on April 10, 2025, Capri Holdings signed a definitive agreement to sell Versace to Prada S.p.A. for $1.375 billion in cash. The transaction is expected to close in the second half of calendar 2025, pending regulatory approvals and other standard closing conditions. Starting in fiscal 2026, Versace will be reported as a discontinued operation.
Sneak Peek Into CPRI's 1Q26 Outlook
Capri Holdings provided its fiscal outlook amid ongoing uncertainty around tariffs, foreign currency fluctuations, and potential impacts on consumer spending.
For the first quarter of fiscal 2026, Capri Holdings expects total revenues in the range of $765 to $780, indicating a decline from the $1,067 million recorded in the year-ago quarter. Operating margin is projected to be approximately break-even. The company anticipates net interest income of around $15 million, an effective tax rate of approximately 15% and weighted average diluted shares outstanding of about 119 million.
Diluted earnings per share are forecast to be between 10 cents and 15 cents as compared with a loss of 11 cents per share reported in the year-ago quarter.
For Michael Kors, total revenues are expected to be approximately $615 to $625 million with an operating margin in the mid-single-digit range.
For Jimmy Choo, total revenues are expected to be in the range of $150 to $155 million, with an operating margin of approximately break-even.
Capri Holdings’ FY26 View
For fiscal 2026, management now expects total revenues in the range of $3.3-$3.4 billion compared with $4.4 billion reported in 2025. The company anticipates an operating income in the range of around $100 million, including the estimated tariff impact.
Net interest income for fiscal 2026 is projected at $85 to $90 million, with an effective tax rate of approximately 15% and weighted average diluted shares outstanding of about 119 million.
It expects diluted earnings per share of $1.20-$1.40 compared with a loss of $10 per share in 2024. Inventory levels are expected to decline in the mid-single-digit range, while capital expenditures are forecast at around $110 million.
For Michael Kors, total revenues are anticipated in the band of $2.75 to $2.85 billion with an operating margin in the high-single-digit range.
For Jimmy Choo, total revenues are anticipated in the range of $540 to $550 million with an operating margin in the negative mid-single-digit range.
Shares of this Zacks Rank #3 (Hold) company have lost 18% in the past three months against the industry’s growth of 6%.
CPRI Stock's Price Performance in the Past 6 Months
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales implies growth of 10% and 2.9%, respectively, from the year-ago actuals. GOOS delivered a trailing four-quarter average earnings surprise of 57.2%.
Allbirds is a lifestyle brand with naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Allbirds’ current financial year’s earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for SFIX’s fiscal 2025 earnings implies growth of 64.7% from the year-ago actual. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.
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Capri Holdings Q4 Earnings Fall Short of Estimates, Revenues Dip Y/Y
Capri Holdings Limited (CPRI - Free Report) has posted drab fourth-quarter fiscal 2025 results, wherein the top and bottom lines declined year over year. Total revenues surpassed the Zacks Consensus Estimate, while earnings missed the same.
Capri Holdings’ fourth-quarter results reflect that the company is in the early stages of a strategic turnaround amid ongoing macroeconomic challenges. While fiscal 2025 proved difficult, Capri is beginning to see positive indicators that its new strategic initiatives are gaining traction.
A key highlight was the announced sale of the Versace brand to Prada Group, a move aimed at sharpening Capri’s focus, strengthening its balance sheet, reducing debt, and potentially reinstating share repurchases. Its performance is expected to improve throughout fiscal 2026, positioning the company for a return to growth in fiscal 2027 and beyond.
Capri Holdings Limited Price, Consensus and EPS Surprise
Capri Holdings Limited price-consensus-eps-surprise-chart | Capri Holdings Limited Quote
More on Capri Holdings’ Q4 Results
This designer, marketer, distributor and retailer of branded apparel and accessories posted an adjusted quarterly loss of $4.90 per share in the quarter under review. The reported figure was wider than the Zacks Consensus Estimate of a loss of 16 cents. Also, the bottom line declined significantly from adjusted earnings of 42 cents reported in the year-earlier quarter. This significant decline was primarily due to a non-cash tax valuation allowance charge.
Total revenues of $1,035 million surpassed the Zacks Consensus Estimate of $983 million but decreased 15.4% year over year on a reported basis and 14.1% on a constant-currency basis.
The gross profit decreased 17.7% year over year to $631 million. The gross margin contracted 170 basis points (bps) to 61%.
Capri Holdings reported an adjusted operating loss of $33 million, considerably down from adjusted operating earnings of $78 million in the prior-year quarter.
CPRI’s Q4 Revenue Insights by Segments
Revenues from Versace dipped 21.2% year over year to $208 million on a reported basis, 19.7% on a constant-currency basis. The brand’s gross profit decreased to $136 million from $171 million reported in the year-ago quarter. The gross margin contracted 60 basis points (bps) to 65.4%.
Jimmy Choo’s revenues were $133 million, a 2.9% decrease on a reported basis and a 1.5% constant-currency basis. The brand’s gross profit decreased to $88 million from $96 million reported in the year-ago quarter. The gross margin contracted 390 basis points (bps) to 66.2%.
Revenues from Michael Kors were $694 million, which marked a decrease of 15.6% on a reported basis and 14.4% at constant currency from the prior-year period. The brand’s gross profit decreased to $407 million from $500 million reported in the year-ago quarter. The gross margin contracted 220 basis points (bps) to 58.6%.
Capri Holdings’ Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $166 million, long-term debt of $1.48 billion and total shareholders’ equity, including non-controlling interest, of $372 million. The operating cash flow for fiscal 2025 was $281 million, whereas the free cash flow totaled $153 million.
As of March 29, 2025, CPRI had 1,158 retail stores. These include 711 Michael Kors, 219 Jimmy Choo and 228 Versace stores.
Other Developments
As previously announced, on April 10, 2025, Capri Holdings signed a definitive agreement to sell Versace to Prada S.p.A. for $1.375 billion in cash. The transaction is expected to close in the second half of calendar 2025, pending regulatory approvals and other standard closing conditions. Starting in fiscal 2026, Versace will be reported as a discontinued operation.
Sneak Peek Into CPRI's 1Q26 Outlook
Capri Holdings provided its fiscal outlook amid ongoing uncertainty around tariffs, foreign currency fluctuations, and potential impacts on consumer spending.
For the first quarter of fiscal 2026, Capri Holdings expects total revenues in the range of $765 to $780, indicating a decline from the $1,067 million recorded in the year-ago quarter. Operating margin is projected to be approximately break-even. The company anticipates net interest income of around $15 million, an effective tax rate of approximately 15% and weighted average diluted shares outstanding of about 119 million.
Diluted earnings per share are forecast to be between 10 cents and 15 cents as compared with a loss of 11 cents per share reported in the year-ago quarter.
For Michael Kors, total revenues are expected to be approximately $615 to $625 million with an operating margin in the mid-single-digit range.
For Jimmy Choo, total revenues are expected to be in the range of $150 to $155 million, with an operating margin of approximately break-even.
Capri Holdings’ FY26 View
For fiscal 2026, management now expects total revenues in the range of $3.3-$3.4 billion compared with $4.4 billion reported in 2025. The company anticipates an operating income in the range of around $100 million, including the estimated tariff impact.
Net interest income for fiscal 2026 is projected at $85 to $90 million, with an effective tax rate of approximately 15% and weighted average diluted shares outstanding of about 119 million.
It expects diluted earnings per share of $1.20-$1.40 compared with a loss of $10 per share in 2024. Inventory levels are expected to decline in the mid-single-digit range, while capital expenditures are forecast at around $110 million.
For Michael Kors, total revenues are anticipated in the band of $2.75 to $2.85 billion with an operating margin in the high-single-digit range.
For Jimmy Choo, total revenues are anticipated in the range of $540 to $550 million with an operating margin in the negative mid-single-digit range.
Shares of this Zacks Rank #3 (Hold) company have lost 18% in the past three months against the industry’s growth of 6%.
CPRI Stock's Price Performance in the Past 6 Months
Image Source: Zacks Investment Research
Key Picks
Some better-ranked stocks in the same space are Canada Goose (GOOS - Free Report) , Allbirds Inc. (BIRD - Free Report) and Stitch Fix (SFIX - Free Report) .
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales implies growth of 10% and 2.9%, respectively, from the year-ago actuals. GOOS delivered a trailing four-quarter average earnings surprise of 57.2%.
Allbirds is a lifestyle brand with naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Allbirds’ current financial year’s earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for SFIX’s fiscal 2025 earnings implies growth of 64.7% from the year-ago actual. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.