Capri Holdings Sees Turnaround Gains Pace for Michael Kors and Jimmy Choo

Capri Holdings Limited used the Goldman Sachs Global Consumer and Retail Conference to outline its turnaround strategy for Michael Kors and Jimmy Choo. The company's management said that both brands are seeing better product response, less promotional pressure, and stronger brand momentum.

The message from Capri was upbeat, but executives also noted lingering cleanup work, weak European demand, and inflationary pressure. Michael Kors is emerging from an 18-month reset, with the brand moving from 'cautiously optimistic' to 'optimistic' about its recovery.

Capri expects a 40% increase in earnings per share this fiscal year, supported by higher full-price sell-throughs and tighter costs. The company has cut around $400 million in SG&A over three years, even as marketing spending rises. Marketing investment is approaching 10% of revenue in the back half of the year.

Capri's financial picture is improving as the company shifts away from discounting and rebuilds brand heat. Michael Kors inventory was down 27% in the latest quarter, with continued normalization expected. The company has intentionally removed about $150 million in third-party promotional business, and it expects 75% of that to be replaced in the second half of the year.

The luxury accessories market is expected to return to growth in 2027 after a flat period. Prices and average unit retail are expected to rise in the back half of 2026 as full-price selling improves and promotions ease. Capri trades at a P/E ratio of 17.8 and a remarkably low PEG ratio of 0.15, suggesting the market may be underpricing the company's growth potential.