CPRI

Capri Holdings has had a difficult run, with the stock down about 76% over the past five years, yet current valuation checks offer a more mixed picture rather than a clear call that it is either cheap or expensive today. The roughly 76% share price decline over 5 years signals that investors have marked down Capri Holdings heavily, which can reset expectations and make the current price more sensitive to any change in sentiment. Future progress on brand strength and profitability can support the equity story, while any further pressure on margins or cash generation remains a key risk for how the market prices Capri Holdings. The broader valuation checks give Capri Holdings a value score of 4 out of 6, which points to a mixed picture rather than a clear bargain or clear overvaluation. The issue now is whether Capri Holdings stock at around US$13.50 fairly reflects these risks and possibilities or if the current market price is out of line with what the fundamentals suggest. Spot opportunities beyond Capri Holdings by reviewing hand picked companies in the 44 high quality undervalued stocks that also pair compressed share prices with solid underlying fundamentals. The P/E ratio is a useful lens here because Capri Holdings does not currently pay dividends, so earnings are a key anchor for what investors are paying for the stock. Capri Holdings trades on a P/E of about 16.7x, which is almost identical to the Luxury industry average of roughly 16.7x. That means the stock is currently priced in line with the wider sector and also slightly below the peer group average of about 18.4x. On a simple comparison, the market is not attaching any clear premium to Capri Holdings despite its established brands. The valuation model that blends the company’s growth, margins, size and risk points to a fair P/E closer to 23.0x, which is materially higher than where the shares trade today. This gap suggests the stock price does not fully reflect what that framework implies for Capri Holdings based on its earnings profile. On the P/E multiple, Capri Holdings stock appears undervalued compared with the level suggested by this fair-value framework. See what the numbers say about this price — find out in our valuation breakdown. For Capri Holdings, Simply Wall St Narratives act as the missing link between the current P/E puzzle and the company’s possible futures by spelling out which paths for revenue growth, margins and earnings would need to play out for the stock to be worth materially more or less than today’s price on the Community page. Where a single valuation ratio or model gives one number, Narratives break that into the underlying assumptions so you can follow whether those conditions actually unfold over time. One of the top community narratives on Capri Holdings: 40% undervalued Read one of the top narratives on Capri Holdings Do you think there's more to the story for Capri Holdings? Head over to our Community to see what others are saying! For Capri Holdings, the key message is that the market-multiple work points to an undervalued stock, rather than one that is obviously expensive. That signal sits alongside broader checks that are only mixed, so the discount does not come through as a clear-cut opportunity on its own. The real swing factor from here is whether Capri Holdings can sustain and improve brand strength and profitability enough for the current P/E to re rate. The crux for investors is whether today’s discount reflects mispricing or is the market’s way of accounting for ongoing execution and margin risk. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CPRI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, Aug. 12, 2026 at 8:30 a.m. ET Vice President of Investor Relations - Jennifer Davis Chairman and Chief Executive Officer - John Idol Chief Financial and Chief Operating Officer - Tyler Reddien Operator: Greetings. Welcome to the Capri Holdings Limited First Quarter Fiscal 2027 Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Jennifer Davis, Vice President of Investor Relations. Thank you, Jennifer. You may begin. Jennifer Davis: Good morning, everyone, and thank you for joining us on Capri Holdings Limited First Quarter Fiscal '27 Conference Call. With me this morning are John Idol, Capri's Chairman and Chief Executive Officer; and Tyler Reddien, Capri's Chief Financial and Chief Operating Officer. Before we begin, let me remind you that certain statements made on today's call may constitute forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those we expect. Those risks and uncertainties are described in today's press release and in the company's SEC filings, which are available on the company's website. Investors should not assume that the statements made during this call will remain operative at a later time, and the company undertakes no obligation to update any information discussed on today's call. Unless otherwise noted, all financial information on today's call will be presented on a non-GAAP basis. These non-GAAP measures exclude certain items associated with store renovation plan costs, transaction-related costs, Capri transformation costs as well as restructuring and other charges. To view the corresponding GAAP measures and related reconciliation, please review our latest earnings release posted to our website earlier today at capriholdings.com. Now I would like to turn the call over to Mr. John Idol, Chairman and Chief Executive Officer. John? John Idol: Thank you, Jennifer, and good morning, everyone. We are encouraged by our first quarter results, which exceeded our expectations and demonstrated the progress we are making to build a stronger and more profitable business. Our strategic initiatives across both Michael Kors and Jimmy Choo are driving deeper consumer engagement through enhanced brand storytelling and compelling product innovation. As we look at the balance of fiscal '27, we expect to make further progress executing against our strategic initiatives. First, strengthening brand desirability through compelling storytelling that deepens emotional connections and resonates with both new and existing consumers. Second, creating exciting luxury fashion product that reflects each brand's heritage while clearly leading with design and innovation. Third, delivering elevated and differentiated customer experiences across all touch points, including digital, stores and wholesale. Fourth, leveraging our data analytics across the consumer journey to gain deeper insights and drive more personalized interactions. And fifth, utilizing our increasing cash flow to support brand momentum, including investments in store renovations as well as ongoing investments in IT and digital enhancements while continuing to return capital to shareholders through our share repurchase program. While we remain focused on executing against our strategic initiatives, certain headwinds, including lower-than-anticipated inventory levels at Michael Kors in the second quarter, softer trends in EMEA and updated foreign currency exchange rate assumptions are having an impact on our revenue outlook. As a result, we now anticipate fiscal '27 revenue of approximately $3.4 billion. Based on our revised revenue expectations, we are taking actions to reduce operating expenses, which are enabling us to maintain our fiscal '27 earnings per share outlook of approximately $2.15, representing a 40% growth over the prior year. Now turning to our first quarter results. We were pleased to deliver revenue, operating income and earnings per share above our expectations. Total company revenue was $769 million, down 3.5% versus last year, while operating income increased approximately 40%. This strong profit growth drove earnings per share of $0.67, up approximately 30% compared to the prior year. Looking at first quarter performance by brand, starting with Michael Kors, revenue decreased 7% year-over-year, slightly above our expectations. More broadly, our results at Michael Kors continue to be impacted by our quality of sale initiatives as we reduced promotional activity, third-party sales and off-price shipments. While these actions are deliberate steps to strengthen the long-term foundation of the brand, they are creating near-term pressure on revenue. Turning to Michael Kors revenue by channel. In our own retail channel, sales declined high single digits, modestly below our expectations due to softer trends in EMEA at the end of the quarter and the impact of our strategic decision to reduce markdown inventory levels. Overall, we were encouraged by continued improvement in the quality of our sales during the quarter, including higher full price sell-throughs, growth in AURs and gross margin expansion. These are important indicators of a strong business model and support our confidence in more profitable growth as sales recover. Looking at Michael Kors retail sales by region. In the Americas, trends were similar to the prior quarter with continued positive comparable store sales in our full-price channel. In EMEA, trends declined, impacted by the ongoing conflict in the Middle East and reduced tourist traffic in Europe. While trends in Asia declined slightly, we were pleased that full price comparable sales remained positive in China. In our wholesale channel, revenue exceeded our expectations, declining low single digits. At point of sale, we were pleased to see positive comparable store trends with our wholesale partners, led by a double-digit increase in accessories. Turning to brand awareness and consumer engagement. We continue to reinforce Michael Kors' modern jet-set lifestyle positioning through immersive storytelling, global events and destination-driven experiences that capture the essence of our brand vision, traveling the world in style. Building on the momentum of Hotel Stories, our summer campaign captured the spirit of Saint-Tropez, featuring Suki Waterhouse, Danny Ramirez and our brand ambassador, JC-T. The campaign highlighted the season's most compelling styles while reinforcing our modern jet-set lifestyle positioning. We further extended the reach of the campaign through an immersive Saint-Tropez Hotel Stories experience, bringing together a curated group of 14 global influencers to showcase our collection. Through authentic brand storytelling, the event generated over 100 million impressions, further amplifying awareness and consumer engagement around the world. Beyond our seasonal campaigns, an important highlight of our brand-building efforts was the Met Gala. At this year's event, a number of celebrities wore custom Michael Kors designs, including Anne Hathaway as well as brand ambassadors, Suki Waterhouse and Danny Ramirez, among others. As one of the fashion industry's most visible cultural moments, the event helped amplify brand awareness, elevate desirability and reinforce Michael Kors' authority in fashion luxury. Collectively, these activities helped drive an 8% year-over-year increase in the Michael Kors global consumer database. Through our analytics capabilities, we are leveraging the strength of our extensive database to create deeper and more personal connections with consumers. Turning to product. Our strategy remains centered on delivering exciting fashion with standout style while celebrating our iconic brand codes. Guided by Michael's creative vision, our summer assortment blended classic French elegance with modern ease. New product designs and our broader pricing architecture are continuing to drive stronger full price sell-throughs. In accessories, consumers continue to respond positively to on-trend styles that align with our broader pricing architecture. Our core icons, Hamilton, Laila and Nolita continued to perform well with smaller silhouettes introduced for summer helping to expand consumer reach and attract younger customers. In footwear, we are beginning to see encouraging traction from new on-trend casual styles that reflect Michael's signature blend of jet-set glamor and modern versatility Notable styles included the Nolan sneaker, Pixie jelly ballet flat and the Jacie floral embellished sandal, which resonated with consumers and helped drive improved trends across the category. Looking at ready-to-wear, consumers responded to seasonal styles that captured Michael's effortless glamor. Our summer collection balanced modern fashion designs with timeless wardrobe staples, drawing inspiration from the relaxed sophistication of the South of France. Now I would like to discuss the progress we are making with our store renovation program as our retail locations remain an important pillar of the brand's expression and a driver of our sales recovery. Through our renovations, we are continuing to evolve the Michael Kors jet-set lifestyle with elevated and more immersive customer experiences. During the quarter, we opened 2 new flagship stores in key international markets, including Beijing, China World and Pavilion in Kuala Lumpur. These locations featured our Jet Set Lounge, an immersive experience designed to deepen customer engagement and increase store dwell time. We see meaningful opportunity to build on this innovation and expand Jet Set lounges across flagship locations globally. We believe that our store renovation plan will further strengthen brand desirability and drive higher sales productivity. Early results are encouraging with renovated locations generating significant sales increases versus prior year. Overall, at Michael Kors, we are encouraged by our first quarter performance, which reflected our efforts to enhance brand desirability and consumer engagement. While we are disappointed with our second quarter outlook, we expect Michael Kors revenue to return to growth in the back half of fiscal '27 driven by new product introductions, increased marketing investments, the beginning of a normalization in promotional activity and the increasing benefit from our store renovation program. Looking beyond fiscal '27, we remain excited about the long-term growth potential of Michael Kors. By building on the brand's 45-year heritage as a global fashion luxury house and modernizing the jet-set lifestyle for today's consumer, we are strengthening brand desirability. This positioning is resonating with consumers. Our marketing investments are driving stronger customer engagement and our new product introductions are performing well. We remain confident in our ability to achieve $4 billion in revenue and low 20% operating margins over time. Now turning to Jimmy Choo. We were pleased with the brand's continued momentum. First quarter revenue exceeded our expectations, increasing 10.5% over last year. Growth was broad-based across channels, regions and categories, driven by strong brand momentum and the continued success of our strategic initiatives. Our marketing initiatives are strengthening brand desirability, while our product initiatives are attracting new and younger consumers and creating additional purchase opportunities for existing clients. In our own retail channel, we were pleased with the sequential improvement in trends with sales increasing low double digits and growing across all regions. Turning to wholesale. Revenue also grew low double digits. Trends at point of sale remains strong, driven by continued double-digit increases in North American department stores. The performance across both retail and wholesale gives us confidence that the momentum behind the brand is both broad-based and sustainable. Turning to brand awareness and consumer engagement. Our storytelling continued to highlight the effortlessly alluring essence of Jimmy Choo and the sense of joy and confidence the brand inspires. In the first quarter, our marketing and communication strategy remained focused on strengthening brand heat, driving client acquisition and expanding global cultural relevance. For summer, we introduced our Natural Reflection campaign which reinforced Jimmy Choo's distinctive blend of glamor and craftsmanship set against a striking desert backdrop. The campaign highlights new hero products, including the sculptural Glace Mule, the playful Jelly Drop sandal and the continued evolution of the Cinch bag. Beyond our seasonal campaigns, regional brand ambassadors are playing an increasingly important role in expanding our global cultural relevance. Campaigns featuring our brand ambassadors, Wang Yibo and Bai Lu generated strong engagement across key markets and helped strengthen the brand's visibility with consumers in Asia. We are also increasingly leveraging influencers and immersive brand experiences to expand Jimmy Choo's global reach and connect with consumers in a more meaningful way. A great example was our global influencer trip to Nice, where we brought together a carefully curated group of 16 content creators from around the world with a combined following of more than 36 million people. The event generated nearly 50 million impressions across key markets while showcasing Jimmy Choo through aspirational content-rich experiences. Just as importantly, it helped drive increased interest in featured products and delivered measurable sales results. Additionally, creating distinctive experiences for our VICs remains an important part of our marketing strategy. The third installment of the From The Atelier: Bon series celebrated Jimmy Choo's commitment to craftsmanship and creative collaboration through limited edition Bon bags inspired by the Four Seasons. The collection served as the foundation for curated client events across key markets, pairing rich storytelling with exclusive experiences that deepened engagement among our top clients and drove a 40% increase in VIC sales. Taken together, these initiatives are driving increased desirability and deepening consumer reach, contributing to a 7% increase in Jimmy Choo's global consumer database year-over-year. Turning to product. Jimmy Choo's product strategy remains focused on further developing accessories and expanding our casual footwear offering to support sustainable long-term revenue growth and margin expansion. Accessories continued to be an area of strength with sales increasing double digits versus last year. Our iconic Bon and Cinch franchises performed exceptionally well. During the quarter, we saw outsized growth in day bags, driven by the continued success of the Cinch collection and strong consumer response to new seasonal styles. In evening bags, Bon maintained its strong momentum. Additionally, newer groups such as Bar and Curve are resonating with consumers and broadening the reach of the brand. We remain encouraged by the success of our expanded pricing architecture, which is helping attract new and younger clients without compromising the luxury positioning of the brand. Turning to footwear. Results were encouraging across both dress and casual. In dress footwear, new styles such as Faiz lace pump complemented iconic franchise styles like Sacora, underscoring our ability to balance seasonal updates with timeless designs. In casual footwear, our expanded assortment gained further momentum with strong performance from new seasonal styles, including our Margot Flat while established franchises such as our Sunny sneaker continued to perform well. We believe casual footwear represents a long-term growth opportunity, enabling us to increase purchase frequency among existing consumers while attracting new clients to the brand. Finally, I would like to congratulate Sandra Choi for being appointed an Officer of the Order of the British Empire in recognition of her services to the fashion industry. This prestigious honor is a testament to Sandra's extraordinary creative vision, leadership and lasting contributions. She continues to embody the very best of British design while helping shape Jimmy Choo's influence on the global luxury landscape. Looking ahead, we are increasingly confident in Jimmy Choo's trajectory. The brand is strengthening its connection with consumers. Our marketing initiatives are resonating, and our product strategies are creating new avenues for growth. Jimmy Choo is well positioned to return to profitability in fiscal 2027, driven by strong revenue growth, gross margin expansion and disciplined expense management. Longer term, we are optimistic about our growth opportunities and confident that we can increase revenue to $800 million as well as expand operating margins to the low double-digit range. In conclusion, we remain optimistic about Capri Holdings' future. Across Michael Kors and Jimmy Choo, we have clear strategies focused on elevating brand desirability, deepening consumer engagement, strengthening product innovation and improving the quality of our sales. As we build upon the momentum generated by our strategic actions, we believe Capri Holdings is well positioned to drive sustainable growth, expand profitability and create meaningful long-term value for our shareholders. In closing, I would like to thank our approximately 11,000 employees around the world, whose dedication, focus and talent continue to drive our progress. Now Tyler will take us through our first quarter results and guidance in more detail. Tyler Reddien: Thank you, John, and good morning, everyone. Our first quarter performance reflects the progress we are making to build a stronger and more profitable business. We improved the quality of our sales, generated gross margin and operating margin expansion and grew earnings per share while continuing to invest in our brands. We delivered revenue, operating income and earnings per share above our expectations, driven by better-than-anticipated results at both Michael Kors and Jimmy Choo. These results are beginning to position Capri Holdings for more profitable growth. Looking at our first quarter results in more detail, total company revenue of $769 million decreased 3.5% on a reported basis and 4.1% in constant currency compared to the prior year. Looking at revenue performance by brand, Michael Kors revenue of $590 million decreased 7.1% on a reported basis and 7.6% in constant currency compared to the prior year. Revenue was above our expectation, partially due to the timing of wholesale shipments, more than offsetting modestly softer-than-anticipated retail performance. Our retail results were impacted by softening trends in EMEA at the end of the quarter and by our continued quality of sales initiatives, including a larger-than-expected impact from our strategic decision to reduce markdown inventory levels. Additionally, store closures negatively impacted retail sales in the low single-digit range, similar to prior quarters. As a result, global retail sales declined high single digits. Looking at total Michael Kors revenue by geography, revenue in the Americas decreased 10%, reflecting a sequential improvement relative to the fourth quarter, aided by earlier-than-anticipated wholesale shipments. In EMEA, revenue declined 5% as retail trends slowed towards the end of the quarter. In Asia, trends remained positive with revenue increasing 6%. Turning to Jimmy Choo. Revenue of $179 million increased 10.5% on a reported basis and 9.3% in constant currency compared to the prior year. Global retail sales increased low double digits versus prior year with particular strength in the Americas. Wholesale revenue also increased low double digits, reflecting strong demand for the brand. Looking at total Jimmy Choo revenue by geography, sales increased across all regions with the Americas up 26%, EMEA up 5% and Asia increasing 3%. Now looking at total company margin performance. Gross margin of 65% increased 200 basis points versus last year, driven primarily by higher full price sell-throughs as well as lower tariff rates versus the first quarter of fiscal '26. By brand, Michael Kors gross margin of 63.9% increased 280 basis points versus last year, driven primarily by higher full price sell-throughs and lower tariff rates, partially offset by channel mix. Jimmy Choo gross margin of 68.7% compared to 70.4% last year, lower primarily due to channel mix. Total company operating expenses decreased $10 million due primarily to cost savings initiatives more than offsetting inflationary cost pressures. As a percent of revenue, operating expense was 61.4% compared to 60.5% last year, reflecting expense deleverage on lower revenue. Total company operating income of $28 million represented operating margin expansion of 110 basis points to 3.6%, ahead of our expectations. Looking at operating margin by brand, Michael Kors operating margin of 9.3% was slightly above our expectations. Compared to last year, operating margin declined 60 basis points with higher gross margins more than offset by expense deleverage on lower revenue. Jimmy Choo operating margin of 7.3% was above our expectations and increased 480 basis points compared to the prior year, primarily driven by expense leverage on better-than-anticipated revenue and cost containment actions. Net income was $76 million or $0.67 per diluted share. Now turning to our balance sheet and cash flows. Our balance sheet remains strong, and we ended the quarter with cash of $114 million and debt of $338 million, resulting in net debt of $224 million, down from approximately $1.5 billion last year. During the quarter, we extended our revolving credit facility through 2031. We also executed against our commitment to return cash to shareholders, repurchasing approximately $50 million worth of shares during the quarter. We have an additional $871 million of availability remaining under our share repurchase authorization. Inventory at quarter end was $624 million, a 20% decline year-over-year. This decrease reflected an approximately 25% decline at Michael Kors, driven by a planned reduction in markdown inventory levels as well as in-transit delays. Second quarter inventory is now expected to decline high single digits, reflecting continued delays. We are taking actions to accelerate inventory receipts, including increased use of air freight, and we expect inventory trends to normalize and build through the back half of the year to support our revenue growth. Turning to guidance. We are taking a more conservative view of our revenue outlook for the remainder of fiscal 2027 and now anticipate revenue of approximately $3.4 billion. By brand, we now expect Michael Kors revenue of approximately $2.765 billion, impacted by $50 million from lower-than-anticipated second quarter revenue due to later-than-planned arrival of inventory receipts, $50 million from softer trends in EMEA, and $35 million from foreign currency headwinds. We still expect revenue to return to growth in the second half of the year, supported by new product introductions, increased marketing investments and as promotional level comparisons begin to normalize. At Jimmy Choo, we anticipate revenue of approximately $635 million. For the year, we now anticipate gross margin of approximately 64% compared to 62.3% last year. Our guidance now assumes 10% to 12.5% tariff rates on product imported into the United States as of July 24, and we continue to monitor the evolving tariff situation. We now expect operating expenses of approximately $2 billion. This is a $70 million reduction versus our prior outlook, reflecting our disciplined approach to expense management. Accordingly, we now expect full year operating income to be approximately $170 million, a 40% increase over last year. By brand, we continue to anticipate Michael Kors operating margin to be in the low double-digit range and Jimmy Choo returning to profitability with operating margin in the low single-digit range. Turning to our expectations around certain nonoperating items. We now expect net interest and other income of approximately $100 million. We continue to anticipate an effective tax rate in the low teens range with fluctuations in quarterly tax rates due to our valuation allowance position. We now anticipate weighted average shares outstanding of approximately 110 million, assuming share repurchases of $200 million during fiscal 2027. Based on these assumptions, we continue to expect to generate diluted earnings per share of approximately $2.15, representing 40% growth over the prior year. Turning to second quarter guidance. We now expect total company revenue of approximately $780 million. By brand, we anticipate Michael Kors revenue of approximately $645 million. Our revised outlook now reflects several factors, including an estimated $50 million reduction in revenue resulting from the lower-than-anticipated inventory levels, $15 million from softer than previously anticipated trends in EMEA, $10 million from foreign currency headwinds relative to our prior expectations, and $10 million related to the timing shift of wholesale shipments that benefited the first quarter. We anticipate Jimmy Choo revenue of approximately $135 million, driven by continued brand momentum and the early positive response to our autumn collection. We expect second quarter operating income of approximately $10 million. In terms of operating margin by brand, we anticipate Michael Kors operating margin in the high single-digit percent range and Jimmy Choo operating margin in the negative mid-single-digit percent range. Turning to our expectations around certain nonoperating items. We expect second quarter net interest and other income of approximately $25 million. We anticipate an effective tax rate in the mid-30% range and weighted average shares outstanding of approximately 112 million. As a result, we expect to generate diluted earnings per share of approximately $0.20, significantly above last year. In closing, we delivered meaningful progress in the first quarter, improving the quality of our sales, expanding gross margin, operating margin and earnings per share and continuing our share repurchase program. While near-term inventory delays are impacting our second quarter outlook, we expect revenue to return to growth in the second half of the year. As we move through fiscal '27, we remain focused on driving higher profitability while continuing to invest in our brands. We are confident that the actions we are taking today position us to deliver sustainable long-term value for our shareholders. Now we will open up the line for questions. Operator: [Operator Instructions] Our first question is from Matthew Boss with JPMorgan. Matthew Boss: So John, could you help break down the high single-digit retail sales decline at Michael Kors this quarter? What was performance at full price versus outlet in the quarter that made up that high single-digit decline? And then I guess my question is, what should we expect for second quarter retail sales at Michael Kors versus that high single decline in the first quarter? And for the back half, has anything at all in your Michael Kors retail sales outlook changed at full price versus outlet other than your view on EMEA macro? John Idol: Thank you, Matt. So I want to first start out by saying we were pleased with the results in our first quarter. As I said in my prepared remarks, we are building a stronger and more profitable business. And I think the results indicated that. And we continue on our journey to, first and foremost, look at the quality of sale in both Jimmy Choo and at Michael Kors. And I think we're making very, very strong strides forward in that area. Our full price sell-throughs at both companies were up. Our AURs at both companies were up. And when I look at the health of the sale to the customer, it's getting better each quarter. So we're -- we think that's a very strong indicator of what the future is for Capri and for Jimmy Choo and Michael Kors. In terms of Michael Kors, the retail sales in our full-price channel comped positively in both North America and in Asia, consistent with prior quarter. And unfortunately, in EMEA, we did see, as we move through the quarter, revenues start to be impacted by the conflict and the lack of tourism in the EMEA region. And then, of course, we do have a business, although that's licensed in the territory itself in the Middle East, which has been significantly impacted and remains significantly impacted. And that's why we've taken a more cautious view to what that's going to mean for the balance of the year. So I would say that in our full-price channel, we were pleased with how the results came out during the quarter, consistent with the progress we're making. We've shipped new product into that channel. We realigned our pricing architecture and consumers are responding very positively to that. And I would also add that consistent with that, you heard us talk about our wholesale business turning positive at our retail partners. That's a very big moment for us. There's been 3 years, 4 years of decline in that business, and we're finally starting to see that turn. And then the last thing I would say is while still negative, our footwear business did start to see a sequential improvement. So some of the new product has begun to arrive in the store. Some of it was there for February, March, and we're starting to see some much better sell-throughs, both in our own retail stores as well as our wholesale distribution. So we're very encouraged by what's happening with the full price part of our business and what we see -- what we think we're going to see throughout the balance of the fiscal year. In our outlet business, I would say that trends were consistent, remain down, and we have not really seen any significant change there. And that was, as we've said before, due to the fact we really have limited new product into that channel. It's disappointing. We thought we would begin to have a little bit more. But in particular, in the second quarter, we thought we would start to flow a significant amount of new product that will be here for the third quarter. We feel very confident that we'll be, as I've said previously, around 75% in particular, in the accessories world, a little -- it's going to take us a little longer in the footwear side of things to get the product flowed into outlet. So we feel quite confident that when that new product arrives, we will have the ability to really start to see the same type of changes that we've seen in the full-price business in the outlet channel. I want to remind you all that 2 things. Number one, and I had said this previously, in Q2, in our full-price business, we are going to take one final step back on the clearance and markdown inventory. We are at historical lows for the company. The company has never owned this less amount of inventory in clearance and markdown. And that will have an impact on retail sales, both in full price and in outlet in Q2, and that's planned. We anticipated that. And that will be somewhat amplified by the fact that we will not have the amount of inventory in new full-price product arriving as early as we had anticipated. So that will have an impact on that side of the business. But -- so I think we -- besides the inventory issue, feel that we are tracking on plan and the consumer is responding to the new product to the new marketing initiatives, and we're getting the results that we had more or less anticipated. So we're feeling that we're on track. Operator: Our next question is from Paul Lejuez with Citigroup. Paul Lejuez: I'm curious if you could talk a little bit more about the expense management that you're able to put in place to help hold the P&L together this year. Curious if we should think of that as more onetime adjustments or if we build that into the go-forward expense base. And then, just a little bit more detail on the interest income and other line. Can you talk about what changed on that line? Tyler Reddien: Yes, happy to, Paul. When we look at our full year SG&A, we are reducing our expectations for spend by $70 million relative to our prior guidance. We are taking targeted expense reduction actions across the SG&A pool in order to ensure that we are driving down our overall SG&A level. That said, we are protecting investments to support the business, including marketing, store refurbishments as well as digital and IT investments. So we are ensuring that we're maintaining the investment in what is for the longer-term health of the brand. But we'll continue to evaluate opportunities to improve efficiency across the cost base in the longer term and continue to invest for the future growth. As it relates to interest income, we are just revising our interest income guidance on a full year basis, reflecting where we landed in the first quarter. And so this is just a slight change to our expectation for overall interest income for the year. Operator: Our next question is from Simeon Siegel with Guggenheim Partners. Simeon Siegel: Tyler, can you elaborate just a little bit more on the lower-than-anticipated inventory? Maybe discuss both what happened and the why within that inventory. How much of that is reduction in markdown versus full price? How much is seasonal sales that you'll lose with the delay versus maybe sales you expect to recoup once the product comes in? And then, just higher level, John, kind of piggybacking on what you were just talking about. Any way you could just help us frame where you think you sit on that quality of sales journey? I know you mentioned there's one more, but just what percent of the business is at full price now versus where that was historically? And just really any way to help us think about that time frame? Tyler Reddien: Yes. Thanks, Simeon. So inventory at Michael Kors is lower than we anticipated. Towards the end of the first quarter, we started to see receipts be delayed with longer transit times due primarily to congestion at certain ports in Asia. We are taking action to accelerate receipts where possible, including selective use of airfreight. But ultimately, we do -- we are landing lower than we anticipated, and that is impacting sales. This situation is temporary, and we expect inventory levels to normalize as we progress through the second quarter and at the beginning of the second half of the year, but it is going to impact our second quarter sales. We do anticipate that when we get back to the back half of the year and our inventory levels have normalized, that we will be able to deliver on our expectation of growth for both Michael Kors and Jimmy Choo. John Idol: Simeon, thanks for your question. Let me start out. You had also asked about the difference between the lower inventory level as it relates to delays in delivery and how much of that was lower markdowns. And it's about a 50-50 split, and it comes in at about $50 million in lower markdown inventory, just to give you a size of the magnitude of the reduction in markdown inventory. And I think it's a very important thing to highlight because that is intentional. We've decided to be less promotional facing to the customer. And that's everything from the types of promotions we're doing to the amount of discount we're offering and then to the amount of product and SKUs available for the customer to see that. As you know, there have been other companies that have gone through this process. It is -- it takes time and you have to be patient. And we think it's important that we started on a journey and that we don't all of a sudden start to change that vision of where we want to be long term. Now what I've said to you all on previous calls, we do anticipate Michael Kors to turn positive in the back half of the year. And that is both in full price and in outlet. Outlet might be up 1 or 2 points in Q3 or down 1 point or so and then proceed to get a little bit better in Q4. So in general, we think that Q3 is a pretty significant inflection point for the company. The other part about that is and I've said this to you on previous calls, around October, very early November is when we lapse certain third-party sales that we were conducting out of our outlet stores. I think we said on the last earnings call that it amounted to approximately between that and some other third-party sales, about $150 million for us. So we will start to lapse that in our -- and it's predominantly it will show up in our outlet channel. So I think that's when I would look at the timing. We're already seeing AURs climb. We're already seeing full price sales climb. So both of those parts of what we put in place, we have the evidence that is saying that the customer is responding. And I would say, more importantly, to the design of the product and the excitement of the product. You also heard me mention in my prepared remarks that the store renovation program is going really well, and we're seeing strong double-digit increases in the stores that we're renovating. And we're trying to move as fast as we possibly can on that because that's going to be another positive for us. I think we'll see a much bigger lift from that next fiscal year than we will this fiscal year. And hopefully, we'll be able to, in the next call, start to talk about the amount of stores that will actually get in place. It's very limited right now. But as you know, we've said we have a plan to renovate over 300 of our own stores and a significant amount of department stores. And our partners in the department stores have also been very supportive about that. And so I think, again, very disappointed about this situation around the second quarter. But we view that as a near-term headwind. We know we're going to be able to get through it. As Tyler mentioned, we are going to use some air freight to move some of that delivery up, and we're working very closely with our freight forwarders to help us mitigate and get on faster vessels, et cetera, to get the product here. So I think we will be in a very good position in the third quarter. And based on some of the things that I've said to you, we're feeling still very, very constructive and positive on our ability to return to growth in the back half of the year. And then, of course, I want to mention because this is a total Capri, Jimmy Choo is positive again this quarter. That's the third consecutive quarter that Jimmy Choo has been positive, including comp stores. So we feel very, very good about what's happening at Jimmy Choo and the ability for that brand to continue to grow along with Michael Kors. Operator: Our next question is from Rick Patel with Raymond James. Rakesh Patel: You talked about headwinds at Michael Kors, including reducing markdowns and lower sales to daigou and off-price. Can you give us your updated thoughts on how long you expect those headwinds to persist as we think about Q2 versus the back half? And secondly, as we think about Michael Kors returning to growth in the back half, can you paint a picture for what that looks like from a geographic perspective given the softness you're seeing in EMEA? John Idol: Sorry, I don't know if you heard me. I'll start again. Rick, I think we addressed part of the daigou or the third-party sales in the previous question that was ran about $150 million for the company approximately last year. We do have still headwinds in the first and second quarters and a little bit of the third quarter on that. But post October, November, that should start to mitigate for us as a headwind. Additionally, we will have entered Q2 as we did in Q1 with historic lows on our markdown and clearance inventories that's planned. There was a business there, is a business that we will not vacate and we obviously will have markdown clearance, but it will be at a much lower level than the company has had in the past. And so that will be again, hopefully lesser of a headwind as we head into the third and fourth quarters. And so I think that, that's -- and then lastly is the promotional activity where we will be lapping some of the reductions that we've taken in terms of removing events and sizes of discounts. And then the second part of your question was -- geographic. Rakesh Patel: So related to -- yes, from a geographic perspective, what the improvement could look like in the back half? John Idol: That's right. So number one, I think the change, if I can say sitting here, is we would have anticipated -- we've had a terrific run in Europe. It's been very strong for the company even during some of our more difficult periods. So that is a definitive change for us as we look at the back half of the year. We do not see that improving. And obviously, we've taken down our guidance given what we think is still happening. And hopefully, there will be some movement and some of the conflict in the region will settle down, and we'll get the benefit of that. But for right now, we can't count on that. So we've removed that from our future guidance. I would say the area where we see the biggest increase will be in North America. We're seeing that North America full price comps are once again comp positive. We told you that our wholesale business turned positive in North America at point of sale. So -- and that's the biggest market for us. So we're feeling sufficiently confident that the initiatives that we put in place will begin to see this marketplace turn positive. And we're -- you saw that the overall Asia market did turn positive for us again this quarter and in Michael Kors. So we continue to see that market getting better in China, in particular. And so we would look to see that as a positive for us in the back half of the year. And again, EMEA is the one that we are most disappointed about, and we think we've reflected that in our guidance. Operator: Our next question is from Brooke Roach with Goldman Sachs. Brooke Roach: John, I was hoping you could unpack the trends that you're seeing in Michael Kors outlet in North America in a little bit more detail. What early reads are you seeing from some of the new product launches and reads that give you more confidence in that inflection to growth in that channel in the back half of the year outside of just cycling daigou? Are you seeing any change in traffic levels, consumer brand engagement or NP -- net purchase intent or Net Promoter Scores for that business? John Idol: I would say North American outlet has not changed in terms of trend. It's been fairly similar over the past few quarters. We have delivered some newer styles into the store, which are getting very, very positive results from the consumer. I think I've said to you previously, they are at higher price points. We are actually raising prices in our outlet stores, both on an individual product basis and by lowering discounts. And so that's going to take some time for the customer to adjust to and absorb and accept. We have a new product that's just landed, called Sammy, which is really getting some very, very strong traction for us. We have 2 new hero products, one called Ashton and one called Bailey, that will be in the stores in the later part -- or in the early part of Q3. And then we have some additional styles that will be arriving throughout the fall season. And so we're very hopeful that these new products will resonate with the consumer. And at the same point in time, we're cycling out of older products, and we're kind of through that at this point in time. That's -- when I tell you that we're down in markdown and clearance, it's not just in our full-price stores, but it's also in our outlet stores as well. And again, this is part of the journey with the consumer to really position Michael Kors as a brand that has much higher perceived value with the customer. And then the last thing I'll say is we just completed a consumer research study on our customers. And I was very pleased by the scores that came back on the brand and how the consumer perceived the brand. And we know we have more work to do on the younger consumer, in particular, in Gen Z. But you're going to see some exciting things. We launched our TikTok -- our new TikTok Shop yesterday. We are in the middle of a very, very successful launch of a back-to-school activity with Amazon. We went live with Amazon a little over a year ago on -- with a Michael Kors storefront. It's been very, very successful for us. And we know that by being on platforms like Amazon, like TikTok, and as Tyler mentioned, we are increasing our marketing spend for the company. We're getting close to -- we're going to raise it by almost 200 basis points. We're getting close to 10% of sales, especially in the back half of the year. We're going to be able to focus a lot more initiative around the younger Gen Z consumer. We think that's also going to benefit us. And so I would say to you that a lot is going to be happening for us in Q3 and Q4. And if we've done our job right, we should be in a solid position to turn positive for the back half of the year. Operator: Our next question is from Oliver Chen with TD Cowen. Oliver Chen: Tyler, regarding pricing and where you are in the pricing journey on raising prices relative to the past, what's happening there by channel and interplays with quality of sales? Would be great to be briefed on. John Idol: Great. Thank you, Oliver. I want to start with Jimmy Choo. I think we're extremely pleased with the results that we've seen from Jimmy Choo for the last 3 quarters, both from a revenue standpoint and as you've seen and Tyler discussed it, the brand is returning to profitability this year. We are one of the strongest brands in our department store partners here in North America. You saw the results that we delivered with Jimmy Choo in North America. They're quite exceptional. And that's really a result of 3 things. Number one, our accessories business is getting stronger and stronger by the quarter. We have now department stores who are starting to commit to building shop-in-shops for us. That is a very big hurdle for us to get over. And so I think over the next few years, you're going to be looking at Jimmy Choo as a very strong and powerful accessories business, which will help drive profitability and also growth for the company. And when you look at our pricing architecture, as you know, we have everything from $5,000, $6,000 Bon bags for the ultra-luxury VICs to our new opening price points between $1,500 and $750 on bags like Bar. And then, of course, we have our very, very strong Cinch platform as well. So we think we really have a great pricing architecture and the product is resonating with consumers. And it's also driving a new consumer into the stores, which is excellent for us. And you saw we had growth across all regions with Jimmy Choo. Our footwear business in Jimmy Choo has been also very strong. The casual part of our business is -- continues. We've had amazing success with our sneaker program and especially some of the new lace and slim styles that we've had. And our casual program has also started to really take hold. And lastly, what's interesting is our pump business is starting to come back. There's a trend on pumps again, which is -- for us at Jimmy Choo is always puts a big smile on our face. So we feel good about what's happening there. And once again, we have a very, very broad pricing architecture. You look at things like our jellies, our trainers, our sneakers, our casual and then all the way up to our bridal product, which can be $2,000, $3,000 for shoes, and we have things that open up at $350 to $400. So that is really working quite well for us. And as I said earlier, full price sell-throughs are up at Jimmy Choo. AURs are up. So the health of the business is quite good. And Michael Kors, again, to restate what we did in spring of last year, we actually lowered prices in the full price area, and that was a result of we were taking too many markdowns, and we saw what the customer was really willing to pay for the product. So we went back to more historical prices. And the second thing we did in accessories, in particular, we have a very, very broad range of under $200 bags today or smaller bags. And that is, first off, what is happening from a fashion trend standpoint. And secondly, it's attracting a younger Gen Z customer, in particular, into the brand. So we're really pleased with what's happening with our accessories. We see it in our full-price stores. We see it in our wholesale distribution globally as well. In footwear, just to remind you, that's the business that's actually the business that's the most difficult in our -- across the company and in particular, in our -- well, it's in both channels, full price and outlet. But in full price, we've been able to land newer, I would say, more modern product into the channel. And we saw a very big step change this quarter in terms of product and the sell-through. Pricing was never as much of an issue in footwear for us, but it was really more of a product design. And I think our teams are doing an extraordinary job of getting on trend in that category. And as I said to you in our last call, we lowered ready-to-wear prices by almost 40%, and that's been one of the highest percentage increase businesses for us in our full price category. So -- and then lastly, I have to give a shout out to our watch business, which is now has turned positive, and we're quite pleased to see that, that business is returning to growth in our own stores. In the outlet channel, as I mentioned before, we're actually raising prices. We had gotten too inexpensive for the value of the product that we were delivering. I'd say prices have been raised anywhere from 5% to sort of 10%. We will probably take another increase in prices sometime in the beginning of next calendar year. And we're doing that with individual product itself. And also, we're raising AUR by the reduction in promotional activity. And so -- and you're going to see a further step change in our outlet stores with percentage decline in promotional activity as well as the amount of times that we actually do that, and we'll be focused more on individual price points. I'm also excited in our outlet channel. We're running anywhere between 5% and 6% of sales in the stores that we have our full-price product in the channel. We've put our icons in there, that's Hamilton, Nolita and Laila. And so we're really pleased with what's happening in that channel with our ability to sell full-price product. Again, we have a long way to go to show the customer that we have new and exciting product that warrants this higher price point. And I think we're just really excited about what we think is going to happen starting in September, October, November when what we think is kind of a new face on that product will be in place. The footwear part of outlet will not come until closer to the holiday season. That is something we've, I think, said on our -- on the calls previously, but we are feeling better about what is coming now at that period of time. So we should be about 70%, 75% complete in the outlet stores with product -- new product by September, October, and that will reach a higher level, in particular, when the footwear arrives for the latter part of the calendar Q4. Thank you very much, Oliver. Operator: Our next question is from Adrienne Yih with Barclays. Adrienne Yih-Tennant: John, thanks so much for all the detail, and it's very helpful. But kind of staying on the different -- there's a lot of shifts going on between full line and outlet. So staying with that theme, as you make these minor adjustments to pricing, how are you seeing -- well, how are you messaging those, first of all? And then how are you seeing customer acquisition shifting? Are you regaining your historical customer? How are they finding you? And then I guess, number two, you're lowering initial retails at full line, raising them at outlet, but you also have the promotional kind of overlay, which is muddying, I'm assuming kind of the true demand read. Is the spread between full line and outlet now normalized? Was it just kind of extremely did it get out of whack relative to history? And are we going back to what you know to be that spread that should be? John Idol: Thank you, Adrienne. I think that's a good question to end on. Number one, in full price, in terms of the reduction in prices that we took, that was in February of last year. So I would say we've anniversaried that at this point. So that is like-for-like. In full price, as I said earlier, the one last step that we're -- well, there's 2 last steps. Number one, you will see one further step down in certain seasonal promotional activity that we have done historically for some 10-plus years, that will change in Q4. So that will be the final, kind of, step down on that. In terms of markdown product, we have one last phase to go through in Q2, and I've said this in previous calls and conferences that we will have most likely negative comp store sales in Q2 for full price because of this very large reduction in markdown inventory that will occur in Q2. And then that should be -- that's all, kind of, behind us. In outlet, we are really not -- I would say we're at the very beginning of the price increases, even though we've taken a minor amount of them, the real full amount of product is arriving August, September into the stores. So this is going to be the test with the consumer to say, are you going to accept this higher price from us? Again, we've had some limited test on it. The limited tests appear that, that has had little or no reaction to the customer. I do expect customers to come in and be looking for lower-priced things that they had historically seen from us, and we may lose some of that historic customer. We don't know that yet until we go through it. But we are excited. That's why we're increasing our marketing spend to go out and attract new customers into both full price and outlet, in particular, younger customers who most likely were never shopping with us previously. So we'll be very focused on our new customer acquisition. And then, of course, you asked how are we getting that message out there. We've hired a new gentleman, Corey Moran, came to us from 10 years at Google, and he is working very diligently with our teams around all of the marketing initiatives that we're putting forth. And I would say a great deal of the spend that we're adding to Michael Kors is around really top of the funnel marketing and brand engagement. And we will actually reduce some of our more targeted performance marketing in favor of really talking about the brand story and engaging customers from a storytelling standpoint. So thank you for that question, Adrienne. I'd like to conclude -- thank you. I'd like to conclude the call today by saying thank you for all of you joining us. We are excited about our results for the first quarter. It clearly shows that we're building a stronger and more profitable business. While we're disappointed about our revenue outlook, we are excited about our ability to maintain our $2.15 guidance for the year on earnings per share, which shows our ability to be able to take swift and decisive actions around SG&A when needed without being able -- without sacrificing any of the growth potential for the company with marketing and with capital expenditure to rebuild our stores. So we're excited about the future for Capri. We're very pleased with what's happened with Jimmy Choo and the third quarter of consecutive growth, and we look forward to the back half of the year for Michael Kors, in particular, returning to growth. Thank you for joining us today and look forward to talking to you on our next call. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Capri, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Capri wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Capri Holdings (CPRI) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is executing a 'quality of sale' initiative, deliberately reducing promotional activity, third-party sales, and off-price shipments to strengthen long-term brand equity. Michael Kors performance was driven by a strategic shift in pricing architecture and a reduction in markdown inventory to historical lows, resulting in higher Average Unit Retail (AUR) and gross margin expansion. Jimmy Choo demonstrated broad-based momentum with its third consecutive quarter of positive growth, fueled by a successful expansion into casual footwear and high-end accessories. Operational results were impacted by softer trends in EMEA due to regional conflict and reduced tourist traffic, alongside a strategic decision to exit certain low-margin third-party sales channels. The company is leveraging data analytics to deepen consumer engagement, resulting in an 8% increase in the Michael Kors global consumer database and a 7% increase for Jimmy Choo. Store renovations are emerging as a key growth pillar, with updated locations featuring 'Jet Set Lounges' generating significant sales increases compared to legacy formats. Fiscal 2027 revenue guidance was revised to $3.4 billion, primarily reflecting a $50 million impact from Q2 inventory delays and $50 million from sustained macro softness in EMEA. Management expects Michael Kors to return to growth in the second half of fiscal 2027 as inventory levels normalize and the brand laps the heaviest periods of promotional reduction. The company is implementing a $70 million reduction in operating expenses to protect its $2.15 EPS outlook, focusing cuts on non-essential SG&A while preserving marketing and IT investments. Inventory levels are expected to build through the back half of the year, supported by the increased use of air freight to mitigate Asian port congestion and transit delays. Long-term targets remain unchanged, with management aiming for $4 billion in revenue for Michael Kors and $800 million for Jimmy Choo as brand elevation strategies mature. Inventory at Michael Kors declined 25% year-over-year, reflecting both a planned reduction in markdowns and unplanned in-transit delays due to Asian port congestion. The company extended its revolving credit facility through 2031 and repurchased $50 million in shares, signaling confidence in cash flow despite revenue headwinds. Updated guidance incorporates a 10% to 12.5% tariff rate assumption for U.S. imports as of July 24, representing a known headwind to gross margin recovery. The Middle East conflict and reduced European tourism are cited as persistent headwinds that led to a more cautious revenue outlook for the EMEA region. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that full-price channel comps were positive in North America and Asia, while the overall high-single-digit decline was driven by EMEA softness and intentional markdown reductions. The second quarter will represent the 'final step back' on clearance inventory, which is expected to create a temporary trough in retail sales before an inflection in the third quarter. The $70 million in expense savings are targeted across the SG&A pool but specifically exclude marketing, store refurbishments, and digital investments to ensure long-term health. Interest income guidance was adjusted slightly to reflect actual first-quarter performance and current cash positioning. The $50 million revenue headwind for the second quarter is attributed to the later-than-planned arrival of inventory receipts, while the overall inventory decline at the end of Q1 was split roughly 50-50 between intentional markdown reductions and delivery delays. Management is utilizing air freight to accelerate receipts for the third quarter, expecting a normalization of stock levels to support holiday demand. In Michael Kors outlets, the company is raising prices by 5% to 10% to reflect higher perceived value, while full-price ready-to-wear prices were lowered by 40% to drive volume. Jimmy Choo is successfully utilizing a 'bipolar' pricing strategy, selling $5,000+ luxury bags to VICs while attracting younger customers with new $750 opening price points.

Capri Holdings Limited CPRI reported first-quarter fiscal 2027 results, with revenues declining but adjusted earnings increasing year over year. Both metrics surpassed the Zacks Consensus Estimate. The company reported adjusted earnings of 67 cents per share for the first quarter, up 34% from 50 cents a year earlier. The reported figure exceeded the Zacks Consensus Estimate of 40 cents. Capri Holdings Limited price-consensus-eps-surprise-chart | Capri Holdings Limited Quote Revenues declined 3.5% year over year to $769 million from $797 million but topped the consensus estimate of $750 million. Better full-price selling and lower tariff rates helped lift gross margin, while Jimmy Choo delivered double-digit revenue growth during the quarter. Gross profit edged down 0.4% year over year to $500 million from $502 million. Gross margin expanded 200 basis points to 65% from 63% in the prior-year period, supported by stronger full-price sell-throughs and lower tariff rates despite lower sales. Selling, general and administrative expenses declined 0.9% year over year to $451 million from $455 million. Adjusted operating income increased 40% year over year to $28 million from $20 million. Adjusted operating margin improved 110 basis points to 3.6% from 2.5% in the previous year period. Revenues in the Americas fell 6.3% to $430 million from $459 million and exceeded the Zacks Consensus Estimate of $408 million. Revenues in EMEA slipped 1.8% to $224 million from $228 million and came in below the consensus estimate of $234 million, reflecting softer European trends, reduced tourist traffic and disruption related to the conflict in the Middle East. Asia revenues increased 4.5% to $115 million from $110 million, ahead of the consensus estimate of $111 million. Management also noted positive full-price comparable sales for Michael Kors in China. Michael Kors revenues decreased 7.1% year over year to $590 million from $635 million but exceeded the Zacks Consensus Estimate of $585 million. Revenues in the Americas declined 9.9% to $372 million from $413 million, EMEA revenues fell 5.3% to $142 million from $150 million, while Asia revenues increased 5.6% to $76 million from $72 million. Gross profit declined 2.8% year over year to $377 million from $388 million. Gross margin expanded 280 basis points to 63.9% from 61.1% in the previous year period, benefiting from higher full-price sell-throughs and lower tariff rates. Operating income decreased 12.7% year over year to $55 million from $63 million, while operating margin narrowed 60 basis points to 9.3% from 9.9%, as expense deleverage associated with lower revenues more than offset the gross-margin improvement. Operating income remained above the Zacks Consensus Estimate of $51 million. Jimmy Choo revenues increased 10.5% year over year to $179 million from $162 million, exceeding the Zacks Consensus Estimate of $166 million. Revenues in the Americas climbed 26.1% to $58 million from $46 million, EMEA revenues increased 5.1% to $82 million from $78 million, and Asia revenues rose 2.6% to $39 million from $38 million. Gross profit increased 7.9% year over year to $123 million from $114 million, while gross margin declined 170 basis points to 68.7% from 70.4% due to channel mix. Operating income rose to $13 million from $4 million a year ago, ahead of the Zacks Consensus Estimate of $4 million. Operating margin improved 480 basis points to 7.3% from 2.5%. Retail and wholesale revenues both increased at low-double-digit rates, supported by broad-based growth across regions and product categories. Capri ended the quarter with cash and cash equivalents of $114 million compared with $129 million a year earlier. Total borrowings stood at $338 million, with a net debt of $224 million. Operating cash flow was $ 73 million for the first quarter, with free cash flow of $48 million. Capital expenditure was $ 25 million. Inventory declined year over year to $624 million from $779 million. In the quarter, the company repurchased about 2.6 million shares for $50 million, leaving $871 million available under its authorization. Capri Holdings lowered its fiscal 2027 revenue outlook, now expecting approximately $3.4 billion compared with its previous forecast of $3.525 billion. The revision reflects an estimated $50 million impact from inventory delays at Michael Kors, a $50 million hit from softer trends in the EMEA region related to the ongoing conflict in the Middle East and a $35 million foreign currency headwind. The company also reduced its operating income outlook to approximately $170 million from $190 million previously, while maintaining its earnings per share expectation of about $2.15 and an effective tax rate in the low-teens range. Net interest and other income guidance was raised to approximately $100 million from the earlier expectation of $85-$90 million. At the brand level, Michael Kors' revenue outlook was lowered to approximately $2.765 billion from $2.9 billion, while Jimmy Choo's revenue forecast was increased to approximately $635 million from $625 million. For the second quarter of fiscal 2027, Capri expects revenues of approximately $780 million. The outlook reflects inventory delays at Michael Kors, softer trends in EMEA, foreign currency headwinds and the timing shift of wholesale shipments that benefited the first quarter. The company expects operating income of about $10 million and earnings per share of approximately 20 cents. Michael Kors is projected to generate roughly $645 million in revenues with a high-single-digit operating margin, while Jimmy Choo is expected to produce about $135 million in revenues with a negative mid-single-digit operating margin. Shares of this Zacks Rank #3 (Hold) company have plunged 14.3% over the past three months against the industry’s growth of 7.9%. Image Source: Zacks Investment Research Some better-ranked stocks have been discussed below: Urban Outfitters, Inc. URBN offers lifestyle products and services in the United States and internationally. At present, URBN carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks Consensus Estimate for URBN’s current fiscal-year sales and earnings implies growth of 11.8% and 12.7%, respectively, from the year-ago figures. URBN has delivered a trailing four-quarter earnings surprise of 12.2%, on average. Deckers Outdoors Corporation DECK, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally.  At present, Deckers carries a Zacks Rank of 2. The Zacks Consensus Estimate for DECK’s current fiscal-year sales and earnings indicates growth of 7.9% and 6.7%, respectively, from the year-ago figures. DECK delivered a trailing four-quarter earnings surprise of 15.2%, on average. Boot Barn Inc. BOOT operates specialty retail stores in the United States and internationally. At present, Boot Barn carries a Zacks Rank of 2. The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.7% and 22.6%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Capri Holdings Limited (CPRI) : Free Stock Analysis Report Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Capri Holdings Limited? Here are five stocks we like better. Capri exceeded first-quarter expectations despite revenue falling 3.5% to $769 million, as gross-margin expansion and cost reductions lifted operating income roughly 40% and net income about 30%. Brand performance diverged: Michael Kors revenue dropped 7.1% amid weaker EMEA demand and delayed inventory, while Jimmy Choo revenue grew 10.5% across regions and channels. Capri lowered fiscal 2027 revenue guidance to approximately $3.4 billion because of inventory delays, softer EMEA conditions and foreign-exchange headwinds, but maintained its $2.15 diluted EPS target and expects Michael Kors growth to resume in the second half. Capri's Turnaround Is Taking Shape, But Is the Stock a Buy Yet? Capri (NYSE:CPRI) reported first-quarter fiscal 2027 results that exceeded its expectations, as higher margins and lower operating expenses helped offset a decline in revenue. The company also reduced its full-year revenue outlook, citing delayed Michael Kors inventory receipts, softer conditions in Europe, the Middle East and Africa, and foreign-exchange headwinds, while maintaining its earnings-per-share forecast. Total first-quarter revenue was $769 million, down 3.5% from a year earlier, or down 4.1% in constant currency. Operating income increased about 40% to $28 million, while operating margin expanded 110 basis points to 3.6%. Net income totaled $76 million, or $0.67 per diluted share, up approximately 30% from the prior year. → 3 Drone Stocks That Should Soar After the Summer Slump Tapestry Stock Drops After Strong Quarter and Raised Outlook Chairman and Chief Executive Officer John Idol said the quarter reflected progress in the company’s effort to improve the quality of sales through reduced promotional activity, fewer third-party sales and lower off-price shipments. “We are encouraged by our first quarter results, which exceeded our expectations and demonstrated the progress we are making to build a stronger and more profitable business,” Idol said. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth After a Huge Rally, Is There Any Upside Left for Ralph Lauren Stock? Michael Kors revenue declined 7.1% to $590 million in the quarter, though the result was ahead of Capri’s expectations. The brand’s retail business was affected by softer trends in EMEA late in the quarter, store closures and the company’s planned reduction in markdown inventory. Global Michael Kors retail sales declined by a high-single-digit percentage. By region, Michael Kors revenue declined 10% in the Americas and 5% in EMEA, while Asia revenue increased 6%. Idol said full-price comparable sales remained positive in North America and Asia, including China, but EMEA was pressured by conflict in the Middle East and lower tourist traffic in Europe. → Jersey Mike's Serves Fresh Gains After IPO Stumble Michael Kors wholesale revenue declined by a low-single-digit percentage but exceeded expectations. At the point of sale, the company reported positive comparable-store trends among wholesale partners, led by a double-digit increase in accessories. Jimmy Choo continued to gain momentum, reporting revenue growth of 10.5% to $179 million, or 9.3% in constant currency. Retail and wholesale revenue each increased by a low-double-digit percentage. Sales rose 26% in the Americas, 5% in EMEA and 3% in Asia. Idol said Jimmy Choo’s growth was broad-based across regions, channels and categories. Accessories sales rose by a double-digit percentage, led by the Cinch and Bon Bon bag franchises, while the company also cited demand for casual footwear and newer styles. Jimmy Choo’s global consumer database increased 7% year over year, according to the company. Capri’s gross margin increased 200 basis points to 65%, driven primarily by higher full-price sell-throughs and lower tariff rates compared with the prior-year period. Michael Kors gross margin rose 280 basis points to 63.9%, while Jimmy Choo gross margin declined to 68.7% from 70.4%, primarily due to channel mix. Operating expenses fell by $10 million, reflecting cost-savings actions that more than offset inflationary pressure. Still, operating expenses rose as a percentage of revenue to 61.4% from 60.5% because of lower sales. Michael Kors operating margin was 9.3%, down 60 basis points year over year, while Jimmy Choo operating margin rose 480 basis points to 7.3%. Capri said Jimmy Choo is positioned to return to profitability for the full fiscal year, supported by revenue growth, gross-margin expansion and expense discipline. The company ended the quarter with $114 million in cash and $338 million in debt, resulting in net debt of $224 million, down from approximately $1.5 billion a year earlier. Capri repurchased approximately $50 million of shares during the quarter and had $871 million remaining under its authorization. Capri lowered its fiscal 2027 revenue outlook to approximately $3.4 billion. It now expects Michael Kors revenue of about $2.765 billion and Jimmy Choo revenue of about $635 million. Chief Financial and Chief Operating Officer Tyler Reddien said lower-than-expected inventory at Michael Kors was primarily tied to delayed receipts and longer transit times caused by congestion at certain Asian ports. The company expects second-quarter inventory to decline by a high-single-digit percentage and is using selective air freight to accelerate deliveries. The company expects the inventory situation to be temporary, with inventory building again during the second half to support anticipated revenue growth. Capri expects Michael Kors revenue to return to growth in the back half of fiscal 2027, aided by product introductions, higher marketing investment, normalizing promotional comparisons and store renovations. Fiscal 2027 revenue guidance: approximately $3.4 billion Fiscal 2027 operating income guidance: approximately $170 million Fiscal 2027 diluted EPS guidance: approximately $2.15 Second-quarter revenue guidance: approximately $780 million Second-quarter diluted EPS guidance: approximately $0.20 Capri reduced its expected annual operating expenses by $70 million to approximately $2 billion while preserving planned spending on marketing, store refurbishments, digital initiatives and information technology. The company expects full-year gross margin of about 64%, based on assumed U.S. tariff rates of 10% to 12.5% on imported products as of July 24. For the second quarter, Capri expects Michael Kors revenue of approximately $645 million, including an estimated $50 million impact from lower inventory, $15 million from softer EMEA trends, $10 million from foreign exchange and a $10 million wholesale-shipment timing effect that benefited the first quarter. Idol said the company expects the largest improvement in the second half to come from North America, where Michael Kors full-price comparable sales and wholesale point-of-sale trends have improved. However, he said Capri does not expect EMEA conditions to improve in its outlook and has adjusted guidance accordingly. Capri Holdings Limited (NYSE: CPRI) is a global luxury fashion company that designs, markets and distributes a range of premium lifestyle products. The company's principal brands—Michael Kors, Versace and Jimmy Choo—offer handbags, ready-to-wear apparel, footwear, watches, jewelry, fragrance and other accessories. Capri Holdings combines in-house design talent with international sourcing, manufacturing and retail operations to deliver collections that reflect each brand's distinct heritage and aesthetic vision. Formed in 2018 through the rebranding of Michael Kors Holdings following the acquisition of Versace, Capri has since integrated Jimmy Choo into its portfolio. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Capri Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Capri Holdings, the parent company of Jimmy Choo and Michael Kors, posted first-quarter fiscal 2027 earnings ahead of expectations despite a year-on-year (YoY) sales decline while trimming its full-year outlook. For the three months to 27 June 2026, the group recorded revenue of $769m, a drop of 3.5% on a reported basis and 4.1% at constant currency. The results topped the guidance Capri had issued for the quarter alongside its fourth-quarter fiscal 2026 results, when the company had forecast total revenue of approximately $750m and operating income of approximately $10m. Income from operations rose to $17m from $16m, lifting the operating margin to 2.2% from 2% in the same period last year. Net income climbed to $69m, equivalent to $0.60 per diluted share, up from $56m, or $0.47 per diluted share, in the year-ago quarter. As previously disclosed, the company and Prada entered a stock purchase agreement in April 2025 under which the latter agreed to acquire certain Capri subsidiaries operating its Versace business. Capri classified the Versace business as discontinued operations in its consolidated financial statements for all periods presented, with related assets and liabilities classified as held for sale as of 28 June 2025. The company completed the sale of its Versace business on 2 December 2025. Unless otherwise noted, the results discussed relate only to continuing operations. Among its remaining brands, Michael Kors revenue slipped 7.1% to $590m, or 7.6% at constant currency, partly cushioned by roughly $10m in wholesale shipments that arrived earlier than planned. By contrast, Jimmy Choo grew revenue by 10.5% to $179m, or 9.3% at constant currency. Looking ahead, Capri now projects full-year revenue of around $3.4bn, citing a approximately $50m hit from delayed Michael Kors inventory affecting second-quarter sales, a further $50m drag from weaker EMEA [Europe, Middle East, and Africa] demand tied to the Middle East conflict, and $35m in currency-related headwinds. Operating income for the year is forecast at approximately $170m, alongside net interest and other income of $100m, a low-teens effective tax rate, 110 million weighted average diluted shares, and diluted earnings per share near $2.15. For the second quarter, the company expects revenue of $780m and operating income of roughly $10m, with results weighed down by inventory delays, softer EMEA trends, currency effects and the earlier shipment timing that had boosted the first quarter. The guidance factors in a 10% US tariff rate through 24 July 2026, rising to 10%-12.5% afterwards, with the company cautioning that macroeconomic shifts, tariff changes or currency volatility could alter outcomes. Capri chairman and CEO John D Idol said: “As we look at the balance of fiscal 2027 we expect Jimmy Choo to continue to grow and return to profitability. At Michael Kors certain headwinds, including lower-than-anticipated inventory levels in the second quarter, softer trends in EMEA and updated foreign currency exchange rate assumptions are impacting our revenue outlook.” "Capri reports lower first-quarter sales, updates outlook" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.

Capri Holdings (NYSE:CPRI) reported stronger-than-expected first-quarter fiscal 2027 results, surpassing Wall Street forecasts for both earnings and revenue. However, the luxury fashion group reduced its full-year revenue outlook, sending shares modestly lower after the announcement. The company posted adjusted earnings of $0.67 per share, comfortably ahead of the analyst consensus estimate of $0.39. Revenue totalled $769 million, exceeding expectations of $757 million, although it declined 3.5% from $797 million in the same quarter last year. Despite the better-than-expected first-quarter performance, Capri lowered its fiscal 2027 revenue forecast to approximately $3.4 billion, below the Wall Street consensus estimate of $3.51 billion. Management said the revised outlook reflects several temporary challenges, including around $50 million of lower-than-expected second-quarter revenue at Michael Kors due to inventory delays. The company also cited approximately $50 million of weaker demand across Europe, the Middle East and Africa (EMEA) linked to the ongoing conflict in the Middle East, as well as a further $35 million impact from unfavourable foreign exchange movements. Capri maintained its full-year adjusted earnings per share guidance at approximately $2.15, representing expected growth of around 40% compared with the previous fiscal year. For the second quarter of fiscal 2027, the company forecast revenue of approximately $780 million, significantly below the analyst consensus estimate of $851 million. Management attributed the weaker outlook to inventory delays affecting Michael Kors, softer demand across EMEA, foreign currency headwinds and the timing of wholesale shipments that benefited first-quarter results. Chairman and Chief Executive Officer John D. Idol said the company remains encouraged by its first-quarter performance despite the revised revenue outlook. “We are encouraged by our first quarter results, which exceeded our expectations and demonstrated the progress we are making to build a stronger and more profitable business,” Idol said. Michael Kors generated revenue of $590 million during the quarter, a decline of 7.1% from the prior year. By contrast, Jimmy Choo delivered revenue growth of 10.5%, with sales increasing to $179 million. Capri also expanded its gross margin by 200 basis points to 65.0%, supported by stronger full-price selling and lower tariff costs. During the quarter, the company repurchased approximately 2.6 million shares for $50 million at an average purchase price of $19.31 per share. Capri Holdings stock price

Capri Holdings (CPRI) came out with quarterly earnings of $0.67 per share, beating the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.5 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +67.50%. A quarter ago, it was expected that this luxury retailer would post earnings of $0.11 per share when it actually produced earnings of $0.22, delivering a surprise of +100%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Capri Holdings, which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $769 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.51%. This compares to year-ago revenues of $797 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Capri Holdings shares have lost about 32.3% since the beginning of the year versus the S&P 500's gain of 13%. While Capri Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Capri Holdings was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.44 on $860.22 million in revenues for the coming quarter and $2.06 on $3.52 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Apparel and Shoes is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Figs (FIGS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This health care apparel company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of +75%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Figs' revenues are expected to be $186.09 million, up 21.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Capri Holdings Limited (CPRI) : Free Stock Analysis Report FIGS, Inc. (FIGS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

For the quarter ended June 2026, Capri Holdings (CPRI) reported revenue of $769 million, down 3.5% over the same period last year. EPS came in at $0.67, compared to $0.50 in the year-ago quarter. The reported revenue represents a surprise of +2.51% over the Zacks Consensus Estimate of $750.2 million. With the consensus EPS estimate being $0.40, the EPS surprise was +67.5%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Capri Holdings performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Geographic Revenue- Americas (United States, Canada and Latin America): $430 million versus the two-analyst average estimate of $408.06 million. The reported number represents a year-over-year change of -6.3%. Geographic Revenue- Asia: $115 million versus $111.08 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +4.6% change. Geographic Revenue- EMEA: $224 million compared to the $234.06 million average estimate based on two analysts. The reported number represents a change of -1.8% year over year. Revenue- Jimmy Choo: $179 million versus $166.38 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +10.5% change. Revenue- Michael Kors: $590 million compared to the $585.42 million average estimate based on three analysts. The reported number represents a change of -7.1% year over year. Income from operations- Michael Kors: $55 million versus $50.5 million estimated by two analysts on average. Income from operations- Jimmy Choo: $13 million versus the two-analyst average estimate of $4 million. View all Key Company Metrics for Capri Holdings here>>> Shares of Capri Holdings have returned -14.9% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Capri Holdings Limited (CPRI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Capri Holdings Ltd (NYSE:CPRI) exceeded its own expectations for first-quarter fiscal 2027, delivering revenue, operating income, and earnings per share above forecasts, with EPS up approximately 30% year-over-year. The company's strategic focus on improving sales quality is yielding results, evidenced by higher full-price sell-throughs, growth in average unit retail (AUR), and a 200 basis point expansion in gross margin. Jimmy Choo demonstrated strong momentum with revenue increasing 10.5% year-over-year, marking its third consecutive quarter of growth, driven by broad-based gains across channels, regions, and categories. Capri Holdings Ltd (NYSE:CPRI) maintained its full-year fiscal 2027 earnings per share outlook of approximately $2.15, representing 40% growth, by implementing $70 million in cost-saving measures to offset revenue headwinds. The company's balance sheet remains strong, with net debt reduced to $224 million from approximately $1.5 billion last year, and it continues to return capital to shareholders through its share repurchase program. Capri Holdings Ltd (NYSE:CPRI) revised its full-year fiscal 2027 revenue outlook down to approximately $3.4 billion, citing lower-than-anticipated inventory levels at Michael Kors, softer trends in EMEA, and foreign currency headwinds. Michael Kors' revenue declined 7% year-over-year in the first quarter, with global retail sales down high single-digits, impacted by strategic reductions in promotional activity and markdown inventory levels. The company faces a significant near-term headwind in the second quarter due to delayed inventory receipts, primarily from port congestion in Asia, which is expected to reduce Michael Kors revenue by approximately $50 million. EMEA trends are deteriorating, impacted by the ongoing conflict in the Middle East and reduced tourist traffic in Europe, leading to a more cautious outlook for the region for the remainder of the fiscal year. The outlet channel at Michael Kors continues to experience sales declines, and the company is in the early stages of raising prices there, which carries the risk of losing some historical customers as it tests consumer acceptance. Warning! GuruFocus has detected 7 Warning Signs with CPRI. Is CPRI fairly valued? Test your thesis with our free DCF calculator. Q: John, could you help break down the high single-digit retail sales decline at Michael Kors this quarter? What was performance at full price versus outlet, and what should we expect for second quarter retail sales and the back half?A: John Idle, Chairman and CEO: We were pleased with the results, as we are building a stronger and more profitable business. Full-price sell-throughs and AURs were up at both Michael Kors and Jimmy Choo. At Michael Kors, our full-price channel comped positively in North America and Asia, consistent with the prior quarter. However, EMEA was impacted by the Middle East conflict and reduced tourism. Our wholesale business turned positive at retail partners, a significant milestone after 3-4 years of decline. The outlet business remained down, as we have limited new product in that channel. In Q2, we will take one final step back on clearance and markdown inventory, which is at historical lows, impacting retail sales as planned. We expect Michael Kors to return to growth in the back half of fiscal '27. Q: Can you elaborate on the lower-than-anticipated inventory? How much is reduction in markdown versus full price, and how much sales are lost with the delay versus recouped later?A: Tyler Radine, CFO and COO: Inventory at Michael Kors is lower than anticipated due to delayed receipts from port congestion in Asia. We are using airfreight to accelerate receipts, but it will impact Q2 sales. This is temporary, and we expect inventory levels to normalize in the back half. John Idle added that the $50 million reduction is about a 50/50 split between lower markdown inventory and delivery delays. The markdown reduction is intentional as we become less promotional. We anticipate Michael Kors to turn positive in the back half, with Q3 being a significant inflection point as we lap certain third-party sales of approximately $150 million. Q: Can you talk about the expense management you've put in place to hold the P&L together this year? Is it one-time or go-forward? And what changed on the interest income line?A: Tyler Radine, CFO and COO: We are reducing full-year SG&A expectations by $70 million relative to prior guidance through targeted expense reduction actions. We are protecting investments in marketing, store refurbishments, and digital/IT for long-term brand health. As for interest income, we are simply revising guidance to reflect where we landed in Q1. Q: You talked about headwinds at Michael Kors, including reducing markdowns and lower sales to Daigu and off-price. How long will these persist, and what does the back-half growth look like geographically?A: John Idle, Chairman and CEO: The third-party sales headwind of about $150 million will start to mitigate post-October/November. We entered Q2 with historic lows on markdown clearance inventory, which will be less of a headwind in Q3 and Q4. Geographically, we see the biggest increase in North America, where full-price comps are positive and wholesale turned positive. Asia also turned positive, particularly in China. EMEA is the most disappointing area, and we've reflected that in our guidance. Q: Can you unpack the trends in Michael Kors' outlet in North America? What early reads are you seeing from new product launches that give you confidence in the back-half inflection?A: John Idle, Chairman and CEO: North American outlet trends have been consistent, but we are delivering newer styles at higher price points, which takes time for customers to absorb. New products like Sammy are getting strong traction, and two new hero products, Ashton and Bailey, will arrive in early Q3. We are raising prices in outlet by 5% to 10% and lowering discounts. We completed consumer research showing positive brand perception, and we are launching on TikTok Shop and Amazon to attract younger Gen Z consumers. We are increasing marketing spend by almost 200 basis points to nearly 10% of sales in the back half. Q: Regarding pricing, what's happening by channel and how does it interplay with quality of sales?A: John Idle, Chairman and CEO: At Jimmy Choo, we are pleased with three consecutive quarters of growth. Our accessories business is strengthening, with department stores committing to shop-in-shops. Pricing architecture ranges from $5,000-$6,000 Bonbon bags to opening price points of $750-$1,500. At Michael Kors, we lowered prices in full-price last spring and now have a broad range of under $200 bags attracting Gen Z. In footwear, we've landed more modern product with better sell-throughs. In outlet, we are raising prices 5% to 10% and will take another increase early next calendar year. We are running 5% to 6% of sales with full-price icons in outlet stores. Q: As you make pricing adjustments, how are you messaging those, and how is customer acquisition shifting? Is the spread between full-line and outlet normalized?A: John Idle, Chairman and CEO: In full price, we anniversaried the price reductions from February of last year. We will take one final step down in seasonal promotional activity in Q4. In outlet, we are at the beginning of price increases, with the full amount of new product arriving in August and September. We may lose some historic customers, but we are increasing marketing spend to attract new, younger customers. We hired Corey Moran from Google to focus on top-of-funnel brand engagement and storytelling, reducing some performance marketing. Q: Can you provide more detail on the first quarter results by brand and the revised full-year guidance?A: Tyler Radine, CFO and COO: Total company revenue was $769 million, down 3.5%, with operating income up 40% and EPS of $0.67, up 30%. Michael Kors revenue was $590 million, down 7.1%, while Jimmy Choo revenue was $179 million, up 10.5%. Gross margin expanded 200 basis points to 65%. We now expect fiscal '27 revenue of approximately $3.4 billion, with Michael Kors at $2.765 billion and Jimmy Choo at $635 million. We reduced operating expenses by $70 million to approximately $2 billion, maintaining EPS guidance of $2.15, a 40% increase over prior year. Q: What are the key drivers behind the revised second quarter guidance, and what are your expectations for the back half?A: Tyler Radine, CFO For the complete transcript of the earnings call, please refer to the full earnings call transcript.