The US fashion group Capri Holdings Limited slipped into the red in the second quarter of the 2025/26 financial year. The company also suffered a decline in sales. Overall, however, the results published on Tuesday were above management’s expectations.
In the most recent quarter, ended September 27, sales from continuing operations – excluding contributions from the Versace brand, which was agreed to be sold to fashion group Prada SpA in mid-April – were $856 million (745 million euros). This corresponded to a decrease of 2.5 percent compared to the same period last year. Adjusted for exchange rate changes, revenue fell by 4.2 percent.
The brands Michael Kors and Jimmy Choo have suffered losses in sales
The two brands that remained in the group portfolio after the Versace sale each suffered losses. Michael Kors sales fell 1.8 percent (-3.3 percent at constant currency) to $725 million. This means that the downward trend compared to the first quarter was at least slowed down significantly. Jimmy Choo’s revenue fell 6.4 percent (-9.3 percent at constant currencies) to $131 million.
Not least due to higher customs charges, the gross margin fell from 62.3 to 61.0 percent. Despite significant cost reductions, the operating loss rose from six to twelve million US dollars. Adjusted for special items, operating profit fell from $37 million to $20 million.
The bottom line was a net loss attributable to shareholders of $28 million (€24 million), after the company had achieved a surplus of $24 million in the same quarter last year. However, earnings in the most recent quarter were depressed by higher interest payments and unexpectedly high tax burdens. Net loss from continuing operations was $34 million.
The annual forecasts remain unchanged
Chairman and CEO John Idol was satisfied with the current figures. “The second quarter results give us confidence,” he said in a statement. “Trends continued to improve, with sales, gross margin and operating income exceeding our expectations. This performance demonstrates the progress we are making in executing our strategic initiatives to revitalize our luxury fashion houses.”
In view of recent developments, management saw no reason to change the annual forecasts. For 2025/26, it still expects sales from continuing operations to be between $3.375 and $3.45 billion. The target for operating profit adjusted for special items remains around $100 million.