Capri (NYSE:CPRI) expects growth to accelerate in the second half of the year as new products, increased marketing investment and store renovations support its Michael Kors and Jimmy Choo brands, executives said at the Goldman Sachs Global Retail and Consumer Conference.
Chairman, CEO and Director John Idol said the company has spent roughly the past 18 months resetting product, marketing and store strategies, particularly at Michael Kors. He said early “green shoots” from those efforts are becoming more tangible results and could provide a platform for future growth.
Regional trends remain mixed
Capri sees North America as resilient, with a healthy consumer environment that has particularly benefited Jimmy Choo. Europe and the broader EMEA region remain challenged, according to Idol, partly because conditions in the Middle East have affected both local business and travel into Europe.
In Asia, and China in particular, Idol said the company is seeing a steady return to growth as consumers resume shopping. He said luxury brands positioned around value are generating stronger results in the region, leaving Capri optimistic about Asia’s multiyear growth potential.
Michael Kors repositioning centers on product and reduced promotions
Michael Kors is repositioning its brand around the “Jet Set” concept, which Idol described as a vision of consumers “traveling the world in style.” The company has shifted its creative presentation away from traditional images of airplanes, cars and boats toward hotels, glamping and other experience-oriented settings.
Idol said the company is seeing improved customer response to new products in its full-price and outlet businesses. He highlighted the Laila, Hamilton and Nolita handbag collections as key full-price icons, and said the recently introduced Hamilton slouch bag has generated demand that the company has struggled to meet. In outlets, he cited the Sammy bag as producing high sell-throughs.
The company has also been reducing promotional activity to strengthen the brand’s full-price positioning. Idol said Michael Kors ended the prior quarter with inventories down nearly 27% and with 50% less clearance and markdown inventory than a year earlier. About half of full-price accessories sales now come from icon products that do not go on sale, he said.
Chief Financial Officer and Chief Operating Officer Tyler Reddien said Capri expects Michael Kors to return to growth in the second half as inventory levels normalize and new products arrive through the fall and holiday seasons. The company plans to increase marketing spending to nearly 10% of revenue in the back half of the year.
Idol said the company’s recent TikTok Shop launch performed at four times its initial expectation, while its influencer network has expanded from about 50 people roughly 18 months ago to approximately 450 people today. He said those efforts are helping the brand reach younger Gen Z and millennial consumers.
Capri is also renovating approximately half of its Michael Kors store fleet over the next two to three years. Idol said traffic at the renovated Rockefeller Center flagship has increased by double digits, while sales have risen by an even greater high-double-digit rate. The company expects to have completed about 100 store renovations by next year.
Jimmy Choo builds accessories and casual footwear
At Jimmy Choo, Capri is broadening the brand beyond its traditional association with weddings and party footwear. Idol said the company is positioning the brand around a more casual, lifestyle-oriented image and is seeing growth in categories including sneakers, loafers and lower-heeled footwear.
Accessories sales at Jimmy Choo are currently increasing by more than 20%, Idol said. Capri sees an opportunity for accessories to eventually represent more than 35% of the brand’s revenue. He cited the Bon Bon, Cinch, Curve and Bar collections as platforms helping expand the accessories offering.
Jimmy Choo’s sneaker business has grown to roughly 10% to 15% of sales, according to Idol. He also said the brand’s very important client business can account for 20% to 25% of sales at certain stores.
Reddien said Capri expects Jimmy Choo to be profitable this year, supported by revenue momentum. Longer term, the company expects higher store productivity, greater accessories sales, more full-price sales and manufacturing efficiencies to support margin improvement. Capri manufactures about half of Jimmy Choo footwear, he said.
Outlook includes higher pricing and AI efficiencies
Reddien said Capri expects average prices to rise in the second half, driven by higher full-price sell-throughs and a lower promotional cadence. While the company continues to face inflationary pressures, he said management expects sales growth and operating improvements to help offset those headwinds.
Capri is already using artificial intelligence in customer analytics, product design and back-office functions, Reddien said. The company expects additional AI-driven efficiencies in areas including demand planning and product allocation.
In closing, Idol said Capri’s revenue expectations for the year remain in place and that the company expects a 40% increase in earnings per share for the year. He said the anticipated earnings growth would provide a foundation for fiscal 2028 and beyond.
About Capri (NYSE:CPRI)
Capri Holdings Limited (NYSE: CPRI) is a global fashion company that designs, manufactures, markets and distributes luxury apparel, accessories and footwear. Its portfolio includes the Michael Kors and Jimmy Choo brands, which offer products such as handbags, shoes, ready-to-wear clothing, watches, jewelry, eyewear and fragrances.
Michael Kors is known for its accessible luxury fashion and lifestyle products, while Jimmy Choo focuses on luxury footwear, handbags and accessories. The brands serve customers through company-operated stores, e-commerce platforms, department stores, specialty retailers, travel retail locations and selected licensing arrangements.
Capri Holdings was established as Michael Kors Holdings Limited in 2011 and adopted the Capri name in 2018 after expanding its portfolio through acquisitions of Jimmy Choo and Versace.
