Fashion
US’ Michael Kors & Jimmy Choo see dip as Capri targets FY27 growth
This excludes the performance of Versace, which has been classified under discontinued operations following a $1.375 billion acquisition agreement with Prada SpA, expected to close in the second half of calendar year 2025, Capri Holdings said in a press release.
Capri Holdings has reported revenue of $797 million in Q1 FY26, down 6 per cent, excluding Versace, which is under a $1.375 billion sale to Prada.
Net income rose to $56 million.
Michael Kors and Jimmy Choo saw revenue declines.
FY26 revenue is projected at $3.37–$3.45 billion.
The company aims to stabilise in FY26 and return to growth in FY27, focusing on Michael Kors and Jimmy Choo.
The company reported a gross profit of $502 million, with a gross margin of 63 per cent, nearly flat compared to 63.1 per cent in the prior year. The operating income rose to $16 million from $11 million last year, improving the operating margin to 2 per cent.
On an adjusted basis, the operating income of the group stood at $20 million, with an adjusted margin of 2.5 per cent, down from 3.7 per cent in the prior-year period.
The company posted a net income of $56 million or $0.47 per diluted share, compared to $5 million or $0.03 per diluted share in Q1 FY25. The adjusted net income was $60 million or $0.50 per share, a notable increase from $18 million or $0.16 per share last year.
Inventory levels increased by 10.8 per cent year-over-year to $779 million, driven by $50 million in planned early receipts and an additional $25 million impact from foreign currency exchange and tariffs.
The company generated $20 million in cash flow from operations, spent $13 million in capital expenditures, and ended the quarter with $129 million in cash and $1.7 billion in total borrowings, resulting in net debt of $1.5 billion—unchanged from the prior year.
Segment-wise, Michael Kors revenue fell by 5.9 per cent to $635 million, or 7.3 per cent in constant currency. It delivered a gross profit of $388 million with a margin of 61.1 per cent and operating income of $63 million, resulting in a 9.9 per cent operating margin.
Jimmy Choo’s revenue stood at $162 million, down 6.4 per cent on a reported basis and 9.2 per cent in constant currency. It posted a gross profit of $114 million, improving its gross margin to 70.4 per cent from 67.1 per cent last year. The brand’s operating income was flat at $4 million, with a slightly improved margin of 2.5 per cent.
“We are encouraged by our first quarter results. Trends improved sequentially leading to both revenue and earnings per share that exceeded our expectations. This performance demonstrates the progress we are making as we execute against our strategic initiatives to energise our fashion luxury houses. While still early, we are beginning to see signs that our strategies are working,” said John D Idol, chairman and chief executive officer (CEO) at Capri Holdings.
Looking ahead, Capri Holdings is expecting revenue between $3.37 billion and $3.45 billion in FY26, with operating income of approximately $100 million and net interest income ranging from $85 to $95 million.
The effective tax rate is projected to be in the mid-teens, and diluted earnings per share (EPS) is forecast between $1.2 and $1.4. Michael Kors is expected to generate $2.80 to $2.875 billion in revenue with a high-single-digit operating margin, while Jimmy Choo is projected to earn $565 to $575 million in revenue but will operate at a negative mid-single-digit margin.
For the second quarter (Q2) of FY26, Capri Holdings anticipates revenue between $815 million and $835 million, with a slightly positive operating margin. Net interest income is expected to be around $15 million and the tax rate approximately 40 per cent.
EPS for Q2 is forecast between $0.10 and $0.15. Michael Kors is expected to contribute $685 to $700 million in revenue with a high-single-digit margin, and Jimmy Choo is projected to generate $130 to $135 million in revenue, maintaining a negative mid-single-digit margin.
The outlook incorporates assumed tariffs ranging from 15 to 30 per cent on imports from key sourcing countries, including China, India, Vietnam, Cambodia, Bangladesh, Indonesia, and the European Union (EU), added the release.
“Looking ahead, with the Versace transaction is expected to close in the second half of calendar year 2025, we are focused on executing the strategic initiatives across our two iconic brands, Michael Kors and Jimmy Choo,” added Idol. “We remain on track to stabilise our business this year while establishing a solid foundation for a return to growth in fiscal 2027.”
Fibre2Fashion News Desk (SG)
By
Reuters
Published
August 29, 2025
Gap on Thursday reported comparable sales below Wall Street estimates as customers pulled back on discretionary spending, and it said U.S. tariffs would squeeze its margins in the current quarter.
Shares of the company were down about 2% in extended trading.
Inflationary prices and uncertainty arising from the Trump administration’s trade policy have curbed consumer spending, challenging CEO Richard Dickson’s turnaround efforts to revitalize its brands.
For the quarter ended August 2, Gap’s comparable sales rose 1%, missing estimates of 2.26% growth, while net sales rose slightly to $3.73 billion, almost in line with analysts’ estimates, according to data compiled by LSEG.
In the quarter, net sales in its cheaper Old Navy and namesake Gap brands ticked up 1% each. But sales fell in its pricier brands Banana Republic and Athleta. Sales in the athleisure brand continued their decline, falling 11%.
“Dickson has delivered on his promise to reinvigorate the Gap brand, though it remains to be seen if or how he can do the same for Athleta, where sales continue to decline,” said Sky Canaves, analyst at EMarketer.
Gap, like rivals including American Eagle, opens new tab and Levi Strauss, has pushed its denim line with a new viral “Better in Denim” campaign featuring the global girl group KATSEYE to bump up sales.
The campaign comes weeks after American Eagle’s “Great Jeans” denim campaign with actress Sydney Sweeney.
The company now expects annual operating margin to be between 6.7% and 7%, compared with 7.4% in 2024.
The forecast includes a tariff impact in the range of 100 to 110 basis points, which translates to a hit of $150 million to $175 million.
Canaves said the company’s profit margins could deteriorate as the year progresses.
“Tariff impacts, combined with a heavily promotional environment during the holidays, squeeze margins further.”
In May, Gap announced $250 million to $300 million in tariff-related costs and aimed to mitigate more than half of that amount while working to reduce exposure to countries struck with high tariffs on imports to the United States.
© Thomson Reuters 2025 All rights reserved.
Published
August 28, 2025
Urban Outfitters, Inc. on Wednesday posted record-breaking earnings and sales in the second quarter, thanks to solid sales growth across all brands including its struggling Urban Outfitters chain.
The Philadelphia-based company said sales for the three months ended July 31 surged 11.3% to a record $1.50 billion, with total retail segment sales up 7.8%, and comparable retail segment sales lifting 5.6%.
By brand, comparable sales increased 6.7% at Free People, 5.7% at Anthropologie and 4.2% at Urban Outfitters.
Elsewhere, subscription segment sales skyrocketed by 53.2%, primarily driven by a 48.1% increase in average active subscribers in the current quarter. Wholesale segment sales jumped 18.1%, driven by a 19.5% increase in Free People wholesale sales, thanks to an increase in sales to specialty customers.
As a result of the sales growth, the U.S. company posted a record net income of $143.9 million and earnings per diluted share of $1.58 for the three months ended July 31.
“We are proud to announce record revenues, profits, and earnings per share for the quarter,” said Richard Hayne, chief executive officer, Urban Outfitters, Inc.
“Our success was broad-based, with all five brands achieving positive comparable sales across all geographies. We saw exceptional performance across all of our segments – retail, subscription, and wholesale – and believe these results reflect the strength of our brands, the effectiveness of our strategy, and the talent of our teams. We are confident in our continued momentum.”
Copyright © 2025 FashionNetwork.com All rights reserved.
Published
August 28, 2025
Ssense is reportedly filing for bankruptcy protection following a move by creditors to initiate the sale of the Canadian luxury retailer, as per a letter sent to employees on Thursday.
In an email sent to staff, the Montreal-based company said the protection move follows the filing of an application to sell the company by its main creditor, without consent from the retailer, under the Companies’ Creditors Arrangement Act (CCAA), according to a B0F report.
Chief executive Rami Atallah explained that Ssense will in response file its own CCAA application within 24 hours “to protect the company, keep control of our assets and operations, and fight for the future of the company,” according to the memo.
“Recently, we have worked closely with financial and legal advisors to develop our own restructuring plan to stabilize the business and rebuild it for the future,” said Atallah, as cited by BoF.
“The court will decide which path we follow, likely within the next week. Until then, our focus remains clear: protect value, stabilize the business, and set up a restructuring plan to secure our future.”
It is unknown which creditor pulled the sale trigger.
The retailer’s CEO went on to explain the headwinds facing his company following the Trump administration’s recent trade policies, which have imposed 25 percent tariffs on goods imported from Canada.
Ssense also cited the closure of the “de minimus” exemption, which allowed packages worth less than $800 to enter the U.S. duty free as a hit operationally for the company.
The bankruptcy protection news follows layoffs at Ssense earlier this year, including 100 positions in May, as the firm tries to lower overheads amid the luxury slowdown affecting demand for high-price goods, especially more younger, aspirational luxury shoppers — Ssense’s target market.
Copyright © 2025 FashionNetwork.com All rights reserved.
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