Dive Brief:
- Capri Holdings reported fourth quarter 2025 revenue of $1 billion, a 15.4% year-over-year decrease, according to a Wednesday release. Full fiscal 2025 revenue dropped 14% to $4.4 billion.
- In terms of Q4 revenue by brand, Michael Kors dropped 15.6% year over year to $694 million, and Jimmy Choo was down 2.9% to $133 million. Versace dropped 21.2% year over year to $208 million.
- In April, Capri agreed to sell Versace to Prada Group for $1.4 billion. The transaction is expected to close in the second half of 2025, and Capri will classify Versace as a discontinued operation beginning in fiscal 2026, according to the release.
Dive Insight:
A consumer spending pullback in the luxury sector has caused revenue declines at multiple companies including Burberry, Kering and LVMH.
However, Capri has been posting steady losses for multiple quarters, and Neil Saunders, managing director of analytics firm GlobalData, said Capri’s overall sales declines can’t be chalked up to external factors alone. He added that “the market has not fallen by anywhere near” the degree that Capri’s sales have fallen, and that few companies are showing this kind of deterioration.
“As such, we pin the blame for the downswing firmly on Capri and its management team,” Saunders said in emailed comments. “The very blunt truth is that they have mismanaged their brands and have done very little to add the polish required to drive consumer interest and sales.”
Capri’s poor performance has “also dragged profit deeply into the red,” Saunders said. In Wednesday’s release, Capri posted $1.47 billion in long-term debt and a net loss of $1.2 billion for fiscal 2025.
“This uncomfortable position is one of the reasons why Capri has taken to selling off the family silver in the form of disposing Versace to Prada,” Saunders said. He added that while the deal will help stabilize Capri’s finances, the company still took a loss after originally paying $2.12 billion when it bought the Versace brand.
“The Versace sale buys Capri breathing space; it does not buy it a solution,” Saunders said. “Indeed, if anything, it will put the torrid performance of the problematic Michael Kors brand even more in focus.”
Jimmy Choo’s performance was not bad, said Saunders, but the brand “is far too small a part of the business to make up for the bad performance at Michael Kors,” he added.
“It is now very hard to understand what [Michael Kors] stands for, the price level it wants to play at, and how it is differentiating from other premium brands in the market,” Saunders said. “It is basically, in our view, a mediocre label with an expensive price point attached.”
In a statement, Capri Chairman and CEO John D. Idol said fiscal 2025 was a challenging year for the company but added that the Versace sale would “substantially reduce our debt levels.” He also said the company had new strategies in place and was well positioned to improve the performance at Michael Kors and Jimmy Choo.
In its fiscal 2026 outlook, Capri projected a total revenue of about $3.3 billion to $3.4 billion, with a first quarter 2026 revenue of about $765 million to $780 million.
First quarter revenue for Michael Kors is forecast at between about $615 million and $625 million, while Q1 revenue for Jimmy Choo is forecast at about $150 to $155 million.
