Capri Holdings (NYSE:CPRI) Reports Mixed Q2 FY2026 Results with Revenue Beat and EPS Miss

Capri Holdings Limited (NYSE:CPRI) reported financial results for its second quarter of fiscal 2026, delivering a mixed performance against analyst expectations. While the company's revenue surpassed forecasts, its earnings per share fell short, contributing to a complex market reaction that saw the stock gain in pre-market trading.

Earnings and Revenue Versus Estimates

The company reported total revenue of $856 million for the quarter ended September 27, 2025. This figure exceeded the analyst consensus estimate of approximately $842 million. However, the top-line performance represented a decrease of 2.5% on a reported basis and 4.2% in constant currency compared to the same period last year.

On the bottom line, Capri Holdings reported an adjusted loss per share of $0.03. This missed analyst expectations, which had projected earnings of $0.14 per share. The company attributed the larger-than-expected loss to a higher tax rate due to its valuation allowance position, which negatively impacted adjusted net income by $24 million or $0.20 per share.

Key financial metrics from the quarter include:

• Revenue: $856 million (actual) vs. $842 million (estimate)
• EPS: -$0.03 (actual) vs. $0.14 (estimate)
• Gross margin: 61.0%, down from 62.3% in the prior year
• Operating margin: -1.4% on a GAAP basis; 2.3% on an adjusted basis

Market Reaction and Price Action

Following the earnings release, CPRI shares showed notable strength in pre-market trading, rising approximately 3.76%. This positive movement occurred despite the earnings miss, suggesting investors may be focusing on the revenue beat and management's forward-looking commentary about strategic initiatives and debt reduction plans. The pre-market gain contrasts with the stock's recent performance, which has seen declines over the past week (-8.07%) and month (-2.17%).

Strategic Developments and Outlook

The earnings release highlighted several significant strategic developments, including the pending sale of the Versace business to Prada for $1.375 billion, expected to close in the fiscal third quarter. Chairman and CEO John D. Idol emphasized that the company is now "fully focused on the growth of our two iconic brands Michael Kors and Jimmy Choo" and plans to use the sale proceeds to repay the majority of the company's debt.

Management provided guidance for the coming periods that appears optimistic compared to analyst expectations:

• Q3 FY2026 Revenue Guidance: $975 million to $1.0 billion vs. analyst estimate of $1.024 billion
• Full Year FY2026 Revenue Guidance: $3.375 to $3.45 billion vs. analyst estimate of $3.495 billion
• Full Year FY2026 EPS Guidance: $1.20 to $1.40

The company also announced a new $1 billion share repurchase program authorization, which it expects to begin implementing in fiscal 2027.

Brand Performance Breakdown

The performance of Capri's remaining core brands showed varying results:

• Michael Kors generated revenue of $725 million, decreasing 1.8% on a reported basis, with an operating margin of 10.1%
• Jimmy Choo reported revenue of $131 million, declining 6.4% on a reported basis, with an operating loss of $9 million

The company's financial position showed net debt of $1.64 billion as of September 27, 2025, compared to $1.58 billion in the prior year period.

For investors seeking more detailed earnings information and future estimates, additional data is available through the company's earnings portal.

Disclaimer: This article provides financial analysis for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.