TCF POST Report
Capri Holdings delivered a mixed first-quarter fiscal 2027 performance, with overall revenue declining but profitability improving significantly as its apparel and footwear brands navigated a challenging global retail environment. The results point to contrasting momentum across the company’s portfolio, with Michael Kors continuing to face sales pressure while Jimmy Choo posted double-digit growth driven by broad-based demand.
The company reported a 3.5% decline in consolidated revenue (down 4.1% in constant currency), outperforming internal expectations despite a softer top line. Gross margin expanded by 200 basis points to 65.0%, while adjusted operating income rose about 40% to $28 million and adjusted earnings per share increased roughly 30% to $0.67. Capri also repurchased $50 million of shares during the quarter and expanded its consumer database by 8%, reflecting continued investment in customer engagement.
Michael Kors: Apparel and Accessories Business Faces Revenue Pressure
Michael Kors remained the company’s largest business but continued to experience declining sales during the quarter. Revenue fell 7.1% (down 7.6% in constant currency), although management indicated the results exceeded expectations.
Despite weaker revenue, several operational indicators suggest improving underlying demand. Wholesale point-of-sale sales turned positive, led by double-digit growth in accessories, indicating that retail sell-through outpaced wholesale shipments and that accessories remain a resilient category within the Michael Kors business.
Profitability also strengthened. Gross margin expanded 280 basis points to 63.9%, while operating margin reached 9.3%, slightly exceeding expectations. The figures suggest improved pricing discipline, merchandise management and cost control despite lower sales volumes. The Michael Kors consumer database also expanded 8% year over year, supporting future direct-to-consumer opportunities.
Jimmy Choo Delivers Broad-Based Growth
Jimmy Choo emerged as Capri’s strongest-performing apparel and footwear brand during the quarter, reporting 10.5% revenue growth (9.3% in constant currency), ahead of expectations.
Unlike the more selective performance seen elsewhere in the portfolio, Jimmy Choo’s growth was described as broad-based across channels, regions and product categories, indicating balanced demand rather than dependence on a single geography or distribution channel.
The luxury footwear and accessories brand also generated a 68.7% gross margin, while operating margin expanded 480 basis points to 7.3%, highlighting strong operating leverage as sales increased. Jimmy Choo’s consumer database grew 7% from the prior year, supporting continued customer acquisition efforts.
Outlook Reflects Continued Brand Divergence
For the second quarter of fiscal 2027, Capri expects revenue of approximately $780 million, including about $645 million from Michael Kors and $135 million from Jimmy Choo. For the full fiscal year, the company forecasts approximately $3.4 billion in revenue, with Michael Kors contributing roughly $2.765 billion and Jimmy Choo $635 million. Adjusted diluted EPS is projected at approximately $2.15 for the year.
The quarter illustrates two distinct trends within the apparel and footwear portfolio. Michael Kors continues to work through a lower-revenue environment while improving profitability and benefiting from stronger accessories demand at wholesale. Meanwhile, Jimmy Choo is demonstrating balanced growth across markets and categories, supported by expanding margins and customer acquisition.
Capri also cautioned that the remainder of fiscal 2027 could be influenced by macroeconomic conditions, higher tariff rates, inflationary pressures, weakening consumer confidence and foreign exchange volatility, all of which remain important considerations for the global apparel and footwear industry.