Capri Holdings slips into red in second quarter

US fashion group Capri Holdings Limited slipped into the red during the second quarter of its 2025/26 financial year. The company also experienced a decline in revenue. However, the results, published on Tuesday, exceeded management's expectations.

In the most recent quarter, which ended on September 27, revenue from continuing operations totalled 856 million dollars. This figure excludes contributions from the Versace brand, whose sale to fashion group Prada SpA was agreed in mid-April. This represented a decrease of 2.5 percent compared to the same period last year. Adjusted for currency fluctuations, revenue shrank by 4.2 percent.

Michael Kors and Jimmy Choo suffer revenue declines

The two brands remaining in the group's portfolio following the Versace sale suffered declines. Michael Kors' revenue fell by 1.8 percent to 725 million dollars, or 3.3 percent on a currency-adjusted basis. This significantly slowed the downward trend compared to the first quarter. Jimmy Choo's revenue decreased by 6.4 percent to 131 million dollars, or 9.3 percent on a currency-adjusted basis.

Due in part to higher customs duties, the gross margin fell from 62.3 to 61.0 percent. Consequently, the operating loss increased from six million to 12 million dollars, despite significant cost reductions. Adjusted for special items, operating profit decreased from 37 million to 20 million dollars.

The bottom line was a net loss attributable to shareholders of 28 million dollars, compared to a profit of 24 million dollars in the prior-year quarter. The result in the most recent quarter was impacted by higher interest payments and unexpectedly high tax burdens. The net loss from continuing operations stood at 34 million dollars.

Annual forecasts remain unchanged

Chairman and CEO John Idol expressed his satisfaction with the current figures. “The results of the second quarter give us confidence,” he stated. “Trends have continued to improve, with revenue, gross margin and operating income exceeding our expectations. This performance demonstrates the progress we are making in implementing our strategic initiatives to revitalise our luxury fashion houses.”

In light of recent developments, management saw no reason to change its annual forecasts. For 2025/26, it continues to expect revenue from continuing operations to be between 3.38 and 3.45 billion dollars. The target for operating profit, adjusted for special items, remains at approximately 100 million dollars.

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