Capri Holdings returns to profit in first quarter despite revenue decline

US fashion group Capri Holdings Limited exceeded expectations in the first quarter of the 2025/26 financial year. While the company experienced a significant decline in revenue, it reported a profit, unlike the same period last year, due to significantly lower costs. This is evident from the latest results released on Wednesday.

In the first quarter, which ended on June 28, revenue from continuing operations – excluding contributions from the Versace brand, whose sale to fashion group Prada SpA was agreed in mid-April – amounted to 797 million US dollars. This represents a 6.0 percent decrease compared to the same period last year. Adjusted for exchange rate changes, revenue shrank by 7.7 percent.

Cost reductions boost results

Both brands remaining in the group's portfolio after the Versace sale experienced declines. Michael Kors' revenue decreased by 5.9 percent (7.3 percent currency adjusted) to 635 million US dollars. Jimmy Choo's revenue fell by 6.4 percent (9.2 percent currency adjusted) to 162 million US dollars.

Due to significantly lower costs, the group increased its operating profit to 16 million US dollars, compared to 11 million US dollars in the prior-year period. Net profit attributable to shareholders totalled 53 million US dollars. In the prior-year quarter, the group had recorded a corresponding loss of 14 million US dollars due to losses from Versace. Net profit from continuing operations increased from five to 56 million US dollars.

Group chief executive officer John Idol sees progress in strategic initiatives

Chairman and chief executive officer John Idol viewed the results as confirmation of the strategic course. "We are encouraged by our first quarter results. Trends have steadily improved, resulting in both revenue and earnings per share exceeding our expectations," he said in a statement. "These results demonstrate the progress we are making in implementing our strategic initiatives to revitalise our luxury fashion houses. While it is still early, we are seeing initial signs that our strategies are working."

In light of recent developments, management slightly raised its revenue forecast for the current 2025/26 financial year. It now expects revenue in the range of 3.375 to 3.45 billion US dollars. The earnings targets remained unchanged. The company continues to expect operating profit of approximately 100 million US dollars and diluted earnings per share between 1.20 and 1.40 US dollars.

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