Capri swung to a loss in the second quarter despite seeing a sequential improvement in its top-line numbers.

The company reported a net loss of $34 million for the quarter ended September 27, compared to net income of $42 million in the year-ago period. 

Adjusted net loss was $4 million. A higher than anticipated effective tax rate due to the company’s valuation allowance position negatively impacted adjusted net income by $24 million.

Total revenue for the quarter decreased 2.5 per cent year-on-year to $856 million (down 4.2 per cent in constant currency). The decline was at a slower rate compared to the 6 per cent drop in the first quarter. 

Michael Kors saw a sequential improvement, with sales down 1.8 per cent to $725 million, compared to the 5.9 per cent decrease in Q1. The brand’s operating income was down 16 per cent year-on-year to $73 million.

Jimmy Choo revenue fell 6.4 per cent to $131 million, a similar pace compared to Q1. The brand’s operating loss widened from $5 million in the year-ago period to $9 million.

“We are encouraged by our second quarter results,” said CEO John D Idol. “Trends continued to improve sequentially, which resulted in revenue, gross margin and operating income exceeding our expectations.”

“This performance demonstrates the progress we are making as we execute against our strategic initiatives to energize our fashion luxury houses,” he added.

Capri expects the sale of its Versace brand to Prada to close in the third quarter and plans to use the proceeds to repay the majority of its debt.

For the full year, the company continues to expect revenue from continuing operations to be approximately $3.375 to $3.45 billion.

“Looking ahead, we continue to expect retail trends to improve in the back half of fiscal 2026 positioning us to return to growth in fiscal 2027. Longer term we remain optimistic about the sustainable growth potential of both Michael Kors and Jimmy Choo,” Idol said.