Michael Kors owner Capri forecasts upbeat revenue as luxury demand improves

Capri Holdings forecast second-quarter revenue above estimates on Wednesday, after its turnaround strategy and improving demand for luxury handbags and footwear helped the Michael Kors owner defy a broader retail slowdown.

Its shares shot up about 12% in premarket trading as the company also beat estimates for quarterly profit and revenue.

Investors have been hoping for signs of strength from Capri, after it lost nearly 44% of its stock value over the past year and competitors gained more market share.

In an attempt to stem the declines, Capri kicked off a turnaround strategy that included shedding its struggling Versace label to Italy’s Prada earlier this year. It is also implementing cost-saving measures such as headcount reductions, store renovations and efficiency improvements across its supply chain.

As a result, Michael Kors revenue, which represents 68% of Capri’s total, fell only 5.9% in the quarter, compared with a 14.2% drop a year ago.

Capri said in May it expects U.S. tariffs to raise its fiscal 2026 cost of goods sold by about $60 million. It plans to offset the impact through sourcing optimization, cost efficiencies with partners, and price hikes.

Several retailers, including apparel and footwear makers, have resorted to increasing product prices to counter the impact from the Trump administration’s unpredictable trade policies that have disrupted businesses and supply chains, and increased costs.

Capri maintaining its fiscal 2026 target for operating income at $100 million, despite likely higher net tariff impacts, is “encouraging”, said Jefferies analyst Ashley Helgans.

The company also expects second-quarter revenue of about $815 million to $835 million, compared with estimates of $819.1 million, per data compiled by LSEG.

It reported profit of 50 cents per share, compared with estimates of 13 cents.

Net revenue fell 6% to $797 million. Analysts estimated a 25.7% decline to $793.1 million.