Capri Holdings Sees Better Times Ahead After Shifting Away from Discounts

Capri Holdings, parent company of Michael Kors and Jimmy Choo, reported an improving financial picture at the Goldman Sachs Global Consumer and Retail Conference. The company said it is shifting away from discounting and rebuilding brand heat.

Michael Kors inventory was down 27% in the latest quarter, with continued normalization expected. Clearance and markdown inventory fell 50% year over year, reflecting a deliberate move away from promotional selling. SG&A has been reduced by about $400 million over the past three years, even as marketing spending rises.

The company expects earnings per share to rise 40% this fiscal year, supported by higher full-price sell-throughs and tighter costs. Management sees North America as resilient, Europe as softer, and Asia and China as improving. Despite an optimistic outlook, shares have fallen 42% year-to-date to $13.92, trading near their 52-week low.

Capri Holdings is repositioning both brands to better match current luxury demand, where consumers want fashion, utility, and value. Michael Kors has completed an 18-month reset covering product, marketing, and store presentation. The brand now has three key handbag collections: Laila, Hamilton, and Nolita.

Jimmy Choo is expanding beyond occasion wear into a full lifestyle brand, with accessories and casual footwear driving growth. Management expects Jimmy Choo to be profitable this year and aims to grow accessories to 35% or more of total business over time.