The Michael Kors and Jimmy Choo owner trimmed its full-year sales forecast despite stronger-than-expected first-quarter earnings amid inventory disruptions and softer demand across EMEA
Capri Holdings lowered its fiscal 2027 revenue outlook after reporting a stronger-than-expected first quarter, citing inventory disruptions at Michael Kors, weaker demand across Europe, the Middle East and Africa (EMEA), and foreign exchange headwinds. The company now expects fiscal 2027 revenue of approximately $3.4 billion, down about $125 million from its previous guidance, while maintaining its earnings per share forecast of roughly $2.15 through planned cost reductions.
The revised outlook follows an encouraging first quarter ended June 27, during which net income rose to $69 million from $53 million a year earlier and adjusted earnings per share reached $0.67, surpassing analyst expectations. Revenue totaled $769 million, exceeding forecasts despite a 4.1 percent decline in constant currency. Gross margin improved 200 basis points to 65 percent, supported by stronger full-price sell-through and lower tariff costs.
Chief Executive Officer John D. Idol said the updated forecast reflected approximately $50 million in lost sales from delayed inventory receipts, another $50 million from softer EMEA demand, and roughly $35 million in foreign exchange impacts. Port congestion in Asia delayed merchandise deliveries during the quarter, prompting the company to selectively airfreight products while supply chains normalize.
Capri also continued its strategic repositioning of Michael Kors, reducing promotional activity and tightening inventory as part of a broader effort to elevate the brand’s market positioning. Michael Kors revenue declined 7.6 percent in constant currency during the quarter, while Jimmy Choo posted 9.3 percent growth. Company-wide inventories were down 20 percent from a year earlier, reflecting the deliberate pullback in stock levels.
Idol described the third quarter as an important inflection point for the business, with the company expecting Michael Kors to return to growth during the second half of the fiscal year. The revised guidance underscores the balance Capri is attempting to strike between near-term financial pressures and its longer-term strategy to strengthen brand equity through reduced discounting, disciplined inventory management, and improved profitability.