Capri Holdings Swings to Profit as Versace Sale Trims Debt

Capri reported a net income of $116 million, or 96 cents per share, for the quarter ending in December—a sharp reversal from the $547 million loss recorded during the same period last year. On an adjusted basis, the company posted earnings of 81 cents per share, surpassing the 78-cent consensus estimate. While the bottom line benefited from the Versace divestiture to Prada, the company’s core brands faced headwinds. Revenue at Michael Kors, Capri’s largest brand, slipped 5.6% to $858 million, though Jimmy Choo provided a modest bright spot with a 5% increase in sales.

Strengthening the Balance Sheet

Chief Executive John D. Idol noted that proceeds from the Versace sale were used to aggressively pay down liabilities, leaving the company with just $80 million in debt. This move provides Capri with the financial flexibility to reinvest in Michael Kors and Jimmy Choo as it eyes a return to growth by fiscal 2027. For the current fiscal year ending in March, the company projects total revenue between $3.45 billion and $3.475 billion, with Michael Kors expected to account for the vast majority of that volume.

The results arrive as Capri faces pressure from rivals like Tapestry and broader instability in the luxury sector. The company was recently identified as a major creditor in the bankruptcy filing of Saks Global, the owner of Saks Fifth Avenue and Neiman Marcus. According to reports, this restructuring of America’s luxury department store landscape adds uncertainty to Capri’s wholesale channel, even as management focuses on maintaining brand exclusivity in a competitive market.