Capri Holdings Q1 2026: Navigating Contradictions in Tariffs, Debt Strategy, and Growth Potential for Jimmy Choo

Tariff impacts and pricing strategy, Jimmy Choo strategy and growth potential, debt reduction and financial strategy, strategic focus on direct-to-consumer and wholesale channels, and impact of tariffs and pricing strategy are the key contradictions discussed in Capri Holdings Limited's latest 2026Q1 earnings call.



Improved Revenue and Earnings Trends:
- Capri Holdings Limited reported total company revenue of $797 million for Q1 FY2026, down 6% year-on-year on a reported basis but exceeding expectations.
- The company's earnings per share were $0.50.
- The sequential improvement was driven by trends across all regions, particularly in Michael Kors' full-price stores and marketing initiatives.

Michael Kors and Jimmy Choo Performance:
- Michael Kors' first-quarter revenue decreased 6% on a reported basis compared to the previous year, with similar trends in both retail and wholesale.
- Jimmy Choo's first-quarter revenue decreased 6.4% compared to the previous year.
- The decline was attributed to reduced wholesale exposure and changes in strategic pricing architecture, with positive signs emerging from new product launches and marketing strategies.

Tariff Impact and Mitigation Efforts:
- Capri Holdings anticipates an unmitigated tariff impact of approximately $85 million in fiscal 2026, up from $60 million.
- The increase is due to evolving trade policies and higher tariff rates affecting imports from China, India, and other Asian countries.
- The company plans to offset this impact through sourcing optimization, cost efficiencies, and strategic price increases.

Strategic Initiatives and Consumer Engagement:
- Capri Holdings is focusing on strategic initiatives to reenergize fashion luxury houses, with early signs of success in improving consumer engagement.
- These initiatives include leveraging social media platforms and influencer partnerships to enhance brand desirability, as well as product strategy adjustments.
- The company is experiencing improved full-price sell-throughs and increased brand affinity, which is driving incremental revenue growth expectations.