Capri Holdings Limited Q4 2026 Earnings Recap

Capri Holdings shares rose 6.7% as investors responded positively to notable margin expansion and a clear roadmap for operating income growth, supported by disciplined brand repositioning and share repurchases.

Key Takeaways

• Fourth quarter revenue declined 4% to $796 million, in line with expectations, reflecting ongoing quality of sale initiatives that trimmed promotional and off-price activities.
• Gross margin expanded sharply by 490 basis points to 64.8%, helped by a $40 million tariff refund, underscoring improved profitability.
• Michael Kors revenue fell 5% year-over-year due to deliberate reductions in discounting and third-party sales; however, full-price sell-throughs, average unit retail (AUR), and consumer engagement improved.
• The company returned to profitability in Q4 with EPS of $0.22, significantly ahead of the prior year.
• Fiscal 2027 outlook targets low single-digit revenue growth, approximately 200 basis points of gross margin expansion, a modest increase in operating expenses, and a 60% increase in operating income, supported by $200 million in share repurchases.