Capri forecasts $3.4 billion in 2027 revenue after cutting outlook
Key Facts
Capri Holdings cut its fiscal 2027 revenue forecast to about $3.4 billion after reporting first-quarter revenue of $769 million, down 3.5% as reported and 4.1% excluding the impact of currency. The company said its annual outlook includes pressures tied to delayed inventory at Michael Kors, weak trends in Europe, the Middle East and Africa, and foreign-exchange headwinds. The new forecast comes amid mixed operating performance across the group’s two brands, with Michael Kors revenue down in the first quarter while Jimmy Choo posted growth. The company had set Oct. 30, 2026, as the date for reporting its fiscal second-quarter results. The stock closed at $16.06 on Oct. 29, after $15.29 in the previous session and $15.42 on Oct. 27.
Michael Kors revenue was about $590 million in fiscal 2027’s first quarter, down 7.1% from a year earlier, or 7.6% on a constant-currency basis. By contrast, Jimmy Choo revenue rose to $179 million, up 10.5% as reported and 9.3% excluding currency changes. Operating income also diverged: Michael Kors income fell to $55 million from $63 million, while Jimmy Choo income rose to $13 million from $4 million. Group revenue totaled $769 million, down 3.5% as reported and 4.1% on a constant-currency basis. Chief Executive John Idol said first-quarter results "exceeded our expectations," citing the brands’ initiatives in brand storytelling and product development.
Capri attributed its lower annual revenue forecast to three main items: about $50 million in lower-than-expected Michael Kors revenue because of delayed inventory, $50 million from weak trends in Europe, the Middle East and Africa linked to the continuing conflict in the Middle East, and $35 million in foreign-exchange headwinds compared with its previous forecast. For the second quarter, the company forecast revenue of about $780 million and operating income of about $10 million. The quarterly outlook included an estimated $50 million impact from delayed Michael Kors inventory, $15 million from weak regional trends and $10 million from foreign exchange. It also cited an impact of about $10 million from the timing of wholesale shipment conversions, which supported first-quarter results. These items directly explain the pressures reflected in the company’s forecasts for the year and following quarter.
Despite lowering its revenue outlook, the company kept its fiscal 2027 diluted earnings-per-share forecast at about $2.15, which it said represents growth of 40% from the previous year. It estimated annual operating income at about $170 million and net interest and other income at about $100 million. In the first quarter, net income rose to $69 million, or $0.60 per diluted share, compared with $56 million and $0.47 per share in the year-earlier period. Gross margin also improved to 65% from 63%, an increase of 200 basis points; the company attributed the improvement mainly to higher full-price sales and lower tariffs. This highlights a contrast between the profit growth recorded in the first quarter and the revenue pressures included in the company’s subsequent forecasts.
The company’s net inventory was $624 million on June 27, 2026, down 20% from a year earlier. Capri recorded operating cash flow of $73 million in the first quarter, against capital expenditures of $25 million, for free cash flow of $48 million. Net debt also fell to $224 million on June 27, 2026, compared with $1.5 billion on June 28, 2025. The company spent $50 million to repurchase about 2.6 million shares during the quarter, at an average cost of about $19.31 per share. The group includes the Michael Kors and Jimmy Choo brands. The announced release time for second-quarter results on Oct. 30, 2026, was about 7:00 a.m. U.S. Eastern Time, with an earnings call scheduled for the same day at 10:00 a.m.