Capri has reported a steeper sales fall and bigger net loss in the fourth quarter, wrapping up what an analyst described as a “disastrous year”.
For the quarter ended March 29, the company’s revenues slid 15.4 per cent to $1 billion, extending the 11.6 per cent decline in the third quarter. Its operating loss improved 78 per cent to $116 million, but net loss worsened 36 per cent to $645 million.
For the full year, sales decreased 14 per cent to $4.4 billion and net loss increased from $229 million to $1.2 billion.
According to GlobalData MD Neil Saunders, Capri has “capped what has been a disastrous year with a calamitous set of results”.
“While many other premium brands managed to drive some growth, even in a more challenging market, Capri has basically collapsed in a heap with one dismal set of numbers after another,” he continued.
Saunders believed that the sales decline was not down to external factors, adding that the management team have mismanaged their brands and have done very little to add the polish required to drive consumer interest and sales.
He stressed that the bottom line is not sustainable, especially with almost $1.5 billion of long-term debt sitting on the balance sheet.
“This uncomfortable position is one of the reasons why Capri has taken to selling off the family silver in the form of disposing of Versace to Prada,” he elaborated. “The $1.38 billion sale value will help Capri to stabilize its finances, but the valuation stands in stark contrast to the $2.12 billion Capri originally paid for the business.”
At Micheal Kors, sales fell 15.6 per cent in the fourth quarter, off the back of a 9.7 per cent dip in the prior year.
This deterioration results from neglect of the brand, Saunders explained, adding that it is very hard to understand what the brand stands for, the price level it wants to play at, and how it is differentiating from other premium brands.
Sales at Jimmy Choo dropped 2.9 per cent, which is not terrible, according to the analyst, given the poor state of the footwear market.
“However, much of this is to do with the power of the brand rather than any specific management actions. It is also the case that Jimmy Choo is far too small a part of the business to make up for the bad performance at Michael Kors.”
Capri CEO John D Idol said the company is still in the early stages of its turnaround and is seeing several “positive indicators”. He expects trends to improve throughout fiscal year 2026 and that the company will return to growth in fiscal 2027 and beyond.
For FY26, Capri expects revenue to be in the range of $3.3 to $3.4 billion, representing a 23-25 per cent decrease.
