Capri Holdings Ltd ( CPRI ) , a global fashion luxury group, on Tuesday reported its mixed second-quarter financial results.

The company reported an adjusted loss of 3 cents per share, missing analysts’ expectations for a profit of 13 cents. The loss compares with earnings of 64 cents per share a year earlier, reflecting a higher-than-anticipated tax rate.

Total revenue fell to $856 million from $878 million in the same period last year, though it topped the consensus estimate of $825.7 million.

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Gross margin slipped to 61.0% from 62.3% in the prior-year quarter. The company said tariffs reduced the gross margin rate by about 130 basis points, while adjusted operating margin stood at 2.3% for the quarter.

Net inventory at the end of the quarter was $766 million, down 2.8% from a year earlier. Cash and cash equivalents totaled $120 million, while total borrowings stood at $1.76 billion, resulting in net debt of $1.64 billion as of Sept. 27, 2025, compared with $1.58 billion a year earlier.

Segment Performance

Michael Kors reported fiscal second-quarter 2026 revenue of $725 million, down modestly year over year, with gross profit of $430 million and a lower gross margin of 59.3%. Operating income declined to $73 million, reflecting a softer operating margin of 10.1% versus 11.8% a year earlier.

Jimmy Choo generated $131 million in revenue, marking a mid-single-digit decline, while gross profit slipped to $92 million, though gross margin improved to 70.2% from 68.6%. The brand posted an operating loss of $9 million, widening from a $5 million loss a year earlier, as operating margin deteriorated to negative 6.9%.

The company announced that its Board of Directors has approved a three-year share repurchase program authorizing the buyback of up to $1 billion of outstanding ordinary shares, which it expects to begin implementing in fiscal 2027.

Outlook

Management expects full-year revenue of approximately $3.38 billion to $3.45 billion, with diluted earnings per share in the range of $1.20 to $1.40. Wall Street analysts estimate earnings of $1.32 per share, based on revenue of $3.43 billion.

By segment, Michael Kors is projected to generate revenue of about $2.8 billion to $2.88 billion, while Jimmy Choo is expected to deliver revenue of approximately $565 million to $575 million.

The company projects third-quarter revenue in the range of $975 million to $1.0 billion, with diluted earnings per share of approximately 70 cents to 80 cents per share. Analysts expect $1 billion in revenue and 65 cents in earnings.

On a segment basis, the Michael Kors brand is expected to deliver revenue of $825 million to $845 million, while the Jimmy Choo brand is forecast to deliver revenue of about $150 million to $155 million in the third quarter.

The company said its guidance reflects the impact of incremental tariffs on imports into the United States, including rates of 15% from the European Union, 19% from Cambodia and Indonesia, 20% from Bangladesh and Vietnam, 25% from India, and 30% from China.

Executive Commentary

John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “We are encouraged by our second quarter results. Trends continued to improve sequentially, which resulted in revenue, gross margin and operating income exceeding our expectations. This performance demonstrates the progress we are making as we execute against our strategic initiatives to energize our fashion luxury houses.”

Idol continued, “With the Versace sale expected to close in our fiscal third quarter, we are now fully focused on the growth of our two iconic brands Michael Kors and Jimmy Choo. We plan to use the proceeds of the sale to repay the majority of our debt, substantially strengthening our balance sheet and providing greater financial flexibility to both invest in our growth as well as return capital to shareholders in the future.”

Price Action: CPRI shares were trading lower by 0.21% to $20.68 at last check Tuesday.

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