Capri Holdings Ltd. 10-K Summary: Fiscal Year Ended March 28, 2026
Business Context and Reporting Period
This filing covers the fiscal year ended March 28, 2026 (Fiscal 2026). Capri Holdings Ltd. operates as a global fashion luxury group with two primary reportable segments: Michael Kors (83% of revenue) and Jimmy Choo (17% of revenue). A significant strategic development during the period was the sale of the Versace business to Prada S.p.A., completed on December 2, 2025, for gross cash proceeds of $1.395 billion. Consequently, Versace results are classified as discontinued operations. The company operates 884 retail stores globally and utilizes a 52-week fiscal year.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Total Revenue | $3,474 million | $3,621 million | (4.1%) |
| Gross Profit | $2,163 million | $2,251 million | (3.9%) |
| Gross Margin | 62.3% | 62.2% | +10 bps |
| Operating Income (Continuing Ops) | $23 million | ($26 million) | Turnaround to Profit |
| Net Income (Continuing Ops) | $80 million | ($526 million) | Significant Improvement |
| Net Income (Total) | $138 million | ($1,179 million) | Includes $58M from discontinued ops |
| Operating Cash Flow | $197 million | $154 million | +28% |
| Total Debt Outstanding | $357 million | $1,490 million | (76%) |
| Cash and Equivalents | $135 million | $107 million | +26% |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 4.1% as reported, driven by a 6.2% decline on a constant currency basis. Michael Kors revenue fell 4.7% due to quality of sale initiatives and reduced promotional activity. Jimmy Choo revenue was relatively flat (-0.8%) but declined 4.3% on a constant currency basis due to softer demand.
- Profitability Improvement: The company returned to profitability in continuing operations ($23 million operating income) compared to a loss in Fiscal 2025. This was driven by a significant reduction in asset impairment charges ($40 million in FY26 vs. $142 million in FY25) and lower restructuring costs.
- Debt Reduction: Total debt decreased by approximately $1.13 billion. Proceeds from the Versace sale were used to fully prepay the $706 million 2025 Term Loans and reduce the Revolving Credit Facility balance from $755 million to $340 million.
- Store Optimization: The total retail store count decreased to 884 from 930 in the prior year, reflecting the closure of 30 stores under the Global Optimization Plan.
Guidance, Outlook, and Risks
Outlook and Strategy: Management aims to grow Michael Kors revenue to $4 billion and Jimmy Choo revenue to $800 million over time. Strategies include increasing full-price sell-throughs, optimizing the retail fleet, and expanding women's accessories for Jimmy Choo to at least 30% of revenue. A new $1.0 billion share repurchase program was approved in November 2025; $79 million was utilized in Fiscal 2026, with $921 million remaining.
Key Risks and Contingencies:
- Tariff Uncertainty: Following a U.S. Supreme Court ruling invalidating IEEPA tariffs, the company recorded a $65 million receivable for refunds. However, new tariffs under Section 122 of the Trade Act of 1974 were imposed in February 2026, creating volatility in supply chain costs.
- Macroeconomic Pressures: Inflation, geopolitical conflicts (Middle East, Ukraine), and reduced consumer confidence continue to impact discretionary spending and logistics costs.
- Legal Proceedings: Securities class action litigation regarding the terminated merger with Tapestry remains pending, though the initial complaint was dismissed without prejudice.
- Foreign Currency: Significant exposure to the Euro, British Pound, and Chinese Renminbi. The company maintains $5.86 billion in notional net investment hedges to mitigate risk.
Investor Verification Checklist
- Tariff Refund Recovery: Verify the timeline and likelihood of recovering the $65 million IEEPA tariff refund receivable from U.S. Customs and Border Protection.
- Debt Covenant Compliance: Confirm continued compliance with the 4.0x net leverage ratio covenant under the 2025 Credit Facilities, especially given the recent debt refinancing.
- Impairment Testing: Monitor the annual goodwill and indefinite-lived intangible asset impairment testing for the Jimmy Choo brand, which has a remaining net carrying value of $209 million.
- Share Repurchase Execution: Track the utilization of the remaining $921 million share repurchase authorization and its impact on earnings per share.
- Discontinued Operations Finalization: Review the final closing statement adjustments for the Versace sale to confirm the final gain on sale amount.