Capri Holdings (NYSE: CPRI) is forecasting a return to Revenue growth and a 40% increase in Earnings-per-share/">Earnings Per Share for fiscal 2027 as strategic turnaround initiatives at Michael Kors and Jimmy Choo begin gaining traction. Investors are closely watching Margin expansion, store renovations, and the recovery of the Michael Kors outlet Business.

Key Highlights

  • Capri Holdings (NYSE: CPRI) expects fiscal 2027 EPS growth of approximately 40%.
  • Michael Kors full-price comparable sales turned positive in Q4 fiscal 2026.
  • Jimmy Choo returned to revenue growth in the second half of fiscal 2026.
  • Gross margin expanded 490 basis points in Q4, aided by Tariff refunds and lower promotions.
  • Management plans approximately 100 store renovations and $200 million in share repurchases during fiscal 2027.

Capri Holdings (NYSE: CPRI) Signals a Luxury Turnaround Is Beginning

Capri Holdings (NYSE: CPRI) entered fiscal 2027 with a markedly more optimistic tone after a year spent restructuring operations, tightening distribution, and rebuilding Brand desirability across Michael Kors and Jimmy Choo.

The owner of Michael Kors and Jimmy Choo reported fourth-quarter fiscal 2026 revenue of $796 million, down 3.7% year-over-year on a reported basis. Yet beneath the modest revenue decline, management argued the business is beginning to show tangible signs of operational recovery.

Gross margin expanded sharply by 490 basis points to 64.8%, supported partly by a tariff-related refund receivable, but also by structurally higher full-price selling, lower promotional activity, and improved inventory discipline.

Most notably, Capri Holdings (NYSE: CPRI) returned to profitability, reporting Diluted Earnings per Share of $0.22 compared with a loss in the prior year period.

The results suggest the company’s multi-year repositioning strategy — particularly at Michael Kors — may finally be stabilising the business after years of declining sales, elevated discounting, and weakening brand perception.

Why Michael Kors Is Central to Capri Holdings’ Recovery Strategy

The vast majority of investor focus remains on Michael Kors, which still generates the bulk of Capri Holdings’ revenue and earnings power.

Michael Kors revenue declined 5.5% year-over-year during the quarter, though management repeatedly emphasised that the decline was largely self-inflicted as part of its “quality of sale” initiatives. Those measures included reducing off-price shipments, cutting promotional intensity, and scaling back third-party outlet sales.

According to management, those actions reduced fiscal 2026 revenue by more than $150 million.

While painful in the short term, the strategy appears to be improving underlying brand health.

Full-price comparable store sales turned positive during the quarter across all geographic regions, supported by stronger consumer Demand for new handbag launches and improved pricing discipline. Average unit retails (AURs) increased at a low double-digit rate, reflecting both reduced discounting and improved product mix.

Management highlighted particularly strong momentum in accessories, where newer handbag franchises such as Hamilton, Laila, and Nolita resonated with younger consumers.

The broader repositioning strategy also appears to be revitalising customer engagement metrics. Capri Holdings (NYSE: CPRI) reported that Michael Kors’ global consumer database increased 8% year-over-year, while Social Media campaigns and influencer partnerships helped rebuild brand visibility among younger demographics.

Store Renovations and Full-Price Channels Become Key Growth Drivers

A major component of Capri Holdings’ turnaround strategy is its store modernisation programme.

The company has already renovated approximately 35 Michael Kors locations and plans to renovate or open roughly 100 stores during fiscal 2027, alongside upgrades to approximately 150 department store doors.

Management noted that renovated stores are producing stronger traffic and sales trends, with some locations attracting entirely new customer cohorts.

The new Beijing China World flagship store may offer insight into the company’s longer-term retail ambitions. The location includes the first Michael Kors “Jet Set Lounge” café concept, designed to increase customer engagement and dwell time while reinforcing the brand’s travel-oriented luxury identity.

Importantly, Capri Holdings (NYSE: CPRI) increasingly views full-price retail as the engine of future growth rather than outlet-driven expansion.

That shift represents a substantial strategic pivot from prior years, when accessible luxury brands often relied heavily on promotional outlet channels to sustain revenue growth.

Management indicated that the Michael Kors full-price business is already generating positive comparable sales growth, while wholesale point-of-sale trends improved to approximately flat year-over-year in Q4.

Jimmy Choo Returns to Growth as Accessories Gain Momentum

Jimmy Choo emerged as one of the brighter spots in the quarter.

Revenue increased 5.3% year-over-year, supported by improving trends across both retail and wholesale channels. North America was particularly strong, with double-digit sales growth in department stores.

Management credited much of the momentum to stronger execution in accessories and casual footwear — two categories viewed as essential for expanding the brand beyond occasion-driven luxury footwear.

The company highlighted encouraging demand for handbag lines such as Bon Bon, Cinch, Bar, and Curve, alongside growing traction in casual footwear products including the Elisa ballerina flat and Sunny sneaker.

Capri Holdings (NYSE: CPRI) believes accessories could eventually represent 30% to 40% of Jimmy Choo revenue, compared with the low-to-mid 20% range currently.

At the same time, management is developing a broader profit improvement programme at Jimmy Choo that will include store fleet optimisation, SKU rationalisation, Supply-chain efficiencies, and tighter SG&Amp;A controls.

While Jimmy Choo still reported a negative Operating Margin in Q4, management expects the brand to return to profitability during fiscal 2027.

Capri Holdings (NYSE: CPRI) Forecasts Significant Earnings Expansion

Capri Holdings issued an ambitious fiscal 2027 outlook.

The company expects revenue to rise at a low single-digit rate to approximately $3.525 billion, while Operating Income is projected to increase roughly 60% year-over-year to approximately $190 million.

Diluted earnings per share are expected to reach approximately $2.15, representing about 40% growth versus fiscal 2026.

Much of that earnings Leverage is expected to come from margin expansion rather than aggressive revenue growth.

Management forecast approximately 200 basis points of gross margin expansion during fiscal 2027 despite ongoing tariff pressures. The company also expects inventory discipline, higher full-price sell-throughs, and lower promotional activity to support profitability.

The timing of the recovery remains important.

Capri Holdings (NYSE: CPRI) expects the first half of fiscal 2027 to remain transitional, with revenue declining modestly before growth accelerates in the second half as the company laps its quality-of-sale initiatives and introduces broader new product assortments into outlet stores.

Management specifically highlighted October 2026 as a potential inflection point for Michael Kors outlet performance.

Balance Sheet Strength Supports Buybacks and Long-Term Investment

Following the sale of Versace, Capri Holdings’ balance sheet has improved dramatically.

The company ended the quarter with net Debt of approximately $222 million, compared with roughly $1.4 billion a year earlier.

That financial flexibility is enabling Capri Holdings (NYSE: CPRI) to aggressively reinvest in its brands while simultaneously returning Capital to shareholders.

The company repurchased $79 million in shares during Q4 and plans an additional $200 million in buybacks during fiscal 2027.

Capital expenditures are also expected to nearly double year-over-year to approximately $125 million, reflecting accelerated investments in store renovations, digital capabilities, and retail enhancements.

Can Capri Holdings (NYSE: CPRI) Sustain Its Luxury Recovery?

The central debate surrounding Capri Holdings now revolves around whether recent improvements represent the early stages of a durable luxury recovery or merely temporary stabilisation following years of underperformance.

There are increasingly credible signs that the company’s strategic reset is gaining traction. Full-price momentum is improving, promotional dependency is falling, younger consumers are re-engaging with the brands, and profitability appears poised for meaningful recovery.

However, risks remain substantial.

Michael Kors’ outlet channel continues to face pressure, wholesale sales remain structurally challenged, and the broader luxury industry is navigating slower global demand, particularly in North America and China.

Capri Holdings (NYSE: CPRI) is effectively attempting to reposition Michael Kors as a more premium, fashion-led accessible luxury brand while simultaneously expanding Jimmy Choo into a broader lifestyle platform.

If management executes successfully, the company could emerge from fiscal 2027 with materially stronger margins, healthier brand positioning, and a more sustainable Long-term Growth profile.