Capri Holdings Limited (CPRI) reported a 42% year-to-date decline in share price to around $13.92, trading near its 52-week low, as the company’s leadership outlined a robust turnaround strategy at Goldman Sachs’ Global Consumer and Retail Conference. Chairman and CEO John Idol and Chief Operating Officer/Chief Financial Officer Tyler Reddien highlighted a 40% increase in earnings per share for the fiscal year, with expectations of returning to growth in the second half of 2026. Growth is projected to persist in North America and Asia/China through 2027, though European consumer demand remains under pressure into that period. The luxury accessories market is expected to recover in 2027 after a flat year, with Capri anticipating significant efficiency gains from AI-driven operations by 2027 compared to 2026.
The company’s Michael Kors brand has undergone an 18-month reset focused on product innovation, marketing, and store presentation, shifting from a cautiously optimistic to an optimistic brand sentiment. Inventory reductions—including a 27% drop in the latest quarter and a 50% year-over-year decline in clearance and markdowns—have trimmed $150 million in third-party promotional business, with $100 million of that expected to be recovered by year-end. SG&A expenses have been cut by $400 million over the past three years, and marketing spend is now approaching 10% of revenue in the back half of the year. Gross profit margins sit at 62.7%, and the company’s Piotroski score is a perfect 9, reflecting strong financial health.
Michael Kors has introduced new collections like Laila, Hamilton, and Nolita, alongside the Sammy bag, with full-price accessories accounting for about 50% of its full-price business. The brand has repositioned its luxury offerings, targeting price points under $200 for Gen Z and younger consumers while maintaining a broader $795–$1,500 range. Meanwhile, Jimmy Choo is expanding its accessories platform to four categories—Bon Bon, Cinch, Curve, and Bar—and shifting from a wedding-and-party brand to a full lifestyle brand with a focus on effortless elegance. Footwear now makes up 10–15% of its business, with 50% of that produced in-house. The company aims to grow accessories to 35% or more of total revenue, targeting low double-digit operating margins.
Digital transformation is central to Capri’s strategy. The Jet Set campaign has pivoted from traditional travel imagery to experiential branding, including glamping and hotel stays, while TikTok Shop performance exceeded expectations. Influencer marketing has expanded from 50 to 450 active creators. Michael Kors also staged a fashion show at the Museum of Modern Art’s garden and opened 7–10 Jet Set Lounges offering tea and refreshments. Store renovations are underway, with 50% of the global fleet targeted for upgrades over two to three years, including flagship locations like Rockefeller Center and Kenwood Towne Centre, which have delivered double-digit traffic and sales growth.
Capri’s turnaround hinges on operational efficiency, brand revitalization, and digital engagement, positioning the company for sustained growth as the luxury accessories market recovers.
