Capri Holdings (CPRI) Q3 2025 earnings summary

Executive summary

• Revenue declined 12% year-over-year to $1.26 billion, reflecting global luxury demand softness, especially in China and Asia, and brand repositioning challenges at Versace and Michael Kors.

• Net loss was $547 million for the quarter, primarily due to $675 million in impairment charges for Versace and Jimmy Choo.

• Adjusted operating margin was 6.0%, and adjusted EPS was $0.45, both down from the prior year, including $0.19 in foreign currency losses.

• The terminated merger with Tapestry caused management distraction but resulted in a $45 million reimbursement; focus has shifted to standalone growth strategies.

• Management is implementing strategic initiatives and cost reductions, with improvement expected in FY26 and a return to growth in FY27.

Financial highlights

• Total revenue for the quarter was $1.26 billion, down 12% year-over-year.

• Gross margin was 64.4%, down 60 basis points, mainly due to lower full-price sell-throughs.

• Net loss was $547 million (GAAP), with adjusted net income of $54 million; impairment charges totaled $675 million.

• Operating margin fell to 6% (adjusted) from 12.1% last year; GAAP operating loss was $590 million.

• Inventory ended at $892 million, a 13% decrease year-over-year.

Outlook and guidance

• Q4 revenue expected to decline 20% to $975 million, with retail sales down mid-teens and wholesale down ~30%.

• Full-year fiscal 2025 revenue forecast at ~$4.4 billion, operating income at ~$100 million.

• Fiscal 2026 revenue expected at ~$4.1 billion, with operating income at ~$150 million and modest gross margin expansion.

• Versace FY25 revenue ~$810 million, negative high-single-digit margin; FY26 revenue ~$800 million, margin near break-even.

• Management expects continued macroeconomic headwinds, inflationary pressures, and soft luxury demand to impact results in the near term.