Capri Holdings: 3 Key Takeaways for Long-Term Investors

On its second quarter fiscal 2027 earnings call, held on Oct. 30, 2026, Capri Holdings (NYSE:CPRI) announced that total revenue fell 5.5% year over year to $809 million. Operating income rose 55% to $31 million during the quarter as gross margins expanded.

For long-term investors, management's focus on pricing discipline and debt reduction signals a structural shift toward sustainable profitability. Three key takeaways from the call highlight how management plans to drive future value.

1. Michael Kors Cuts Promotions to Boost Pricing Power

Management trimmed inventory marked down for clearance by roughly 40% and cut promotional days by about 50% at Michael Kors. Although fewer discounts created a short-term sales headwind in retail stores, the strategy lifted average unit retail price (AUR), which is the average price customers pay per item, and expanded gross margins.

In our own retail channel, sales declined low double digits as anticipated. We had approximately 40% less markdown inventory available for sale and reduced promotional activity by approximately 50%, both of which created a meaningful headwind to revenue during the quarter.
-- John Idol, Chairman and Chief Executive Officer

2. Jimmy Choo Expands Reach with Casual Designs and Higher Sales

Jimmy Choo generated revenue growth of 11.5% over the prior year, driven by expanding casual footwear styles and handbag collections. The luxury brand is attracting younger buyers while creating additional sales opportunities with existing customers.

Second quarter revenue exceeded our expectations, increasing 11.5% over last year as our marketing and product initiatives attracted new and younger consumers while creating additional purchase opportunities for existing clients.
-- John Idol, Chairman and Chief Executive Officer

3. Capri Accelerates Share Buybacks as Net Debt Drops

Capri Holdings reduced its net debt (total debt minus cash) from $1.6 billion a year ago to $336 million. Increased balance sheet flexibility enabled management to buy back 10.3 million shares in the quarter while raising its full-year repurchase goal to $300 million.

During the quarter, we remained committed to returning capital to shareholders, repurchasing $150 million worth of shares. We repurchased 10.3 million shares in the quarter, reducing our share count by approximately 9%.
-- Tyler Reddien, Chief Financial Officer and Chief Operating Officer

Looking Ahead

Product rollouts and store renovations are building sales momentum across retail channels, paving the way for second-half revenue growth. And underneath that, store productivity and pricing discipline continue to underpin future value.

At both our luxury houses, the benefits of our strategic initiatives are becoming increasingly evident, reinforcing our expectation that Capri will return to revenue growth in the second half of the year.
-- John Idol, Chairman and Chief Executive Officer

Looking ahead, expanding retail footprints and modernizing stores support long-term operating margin expansion, which is the percentage of revenue left after paying operating costs.

Looking beyond fiscal '27, we remain excited about the potential for Michael Kors to return to sustainable growth and achieve $4 billion in revenue with operating margins in the low 20% range.
-- John Idol, Chairman and Chief Executive Officer

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