Capri Holdings Reports 2.5% Revenue Decline and $28 Million Net Loss in Q2 Fiscal 2026

Capri Holdings Limited reported a decline in financial performance for the second quarter of fiscal 2026, with total revenue decreasing by 2.5% to $856 million compared to $878 million in the same period last year. The company's net loss attributable to Capri was $28 million, a significant drop from a net income of $24 million in the prior year. The decline in revenue was primarily driven by decreased sales in both the Michael Kors and Jimmy Choo segments, which saw revenues fall by 1.8% and 6.4%, respectively. The gross profit margin also decreased from 62.3% to 61.0%, reflecting the impact of increased tariffs and a shift in pricing strategy.

In terms of operational changes, Capri Holdings is in the process of divesting its Versace business, having entered into a purchase agreement with Prada for $1.375 billion. This strategic move has led to the classification of Versace's results as discontinued operations, impacting the overall financial metrics reported. The company has also been implementing a Global Optimization Plan, which included the closure of 30 retail stores in the first half of the fiscal year, aimed at streamlining operations and enhancing efficiency.

Capri's balance sheet showed total assets of $5.617 billion as of September 27, 2025, up from $5.213 billion at the end of the previous fiscal year. The increase in assets was accompanied by a rise in total liabilities, which reached $5.687 billion, primarily due to an increase in long-term debt from $1.466 billion to $1.753 billion. The company reported cash and cash equivalents of $120 million, an increase from $107 million, indicating improved liquidity despite the operational challenges.

Looking ahead, Capri Holdings anticipates continued pressure from macroeconomic factors, including inflation and changing consumer spending patterns, which may affect demand for luxury goods. The company is focused on executing its growth strategies while managing costs effectively. The successful completion of the Versace sale is expected to provide additional liquidity and resources for future investments. Capri's management remains cautious but optimistic about navigating the current market conditions and positioning the company for long-term growth.