Capri Holdings Ltd (CPRI)
Capri Holdings (NYSE: CPRI) is the parent of three luxury brands: Michael Kors, Jimmy Choo and Versace. In its FY 2025 10-K, the Company reported revenue of $4.442 billion (–14.1% YoY) and a net loss of $1.182 billion, driven by a 2025 interim impairment of $671 million, a soft luxury goods envir...
Capri Holdings’ 2025 10-K Review: Luxury Under Pressure
Capri Holdings Limited (NYSE: CPRI) is the global parent of three iconic fashion-luxury brands—Michael Kors, Jimmy Choo and Versace. In its latest annual report (Form 10-K for the fiscal year ended March 29, 2025), Capri paints a picture of a fast-changing market, supply-chain challenges and a stark financial reset.
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Business Overview
Segments and Brands
- Michael Kors (68% of revenue): American sportswear-turned-luxury accessories, footwear and apparel.
- Jimmy Choo (14%): British trendsetting luxury footwear and accessories.
- Versace (18%): Milanese haute couture, ready-to-wear, accessories and home.
Distribution Channels
- Company-owned boutiques and outlet stores (1,158 at March 29, 2025)
- E-commerce platforms
- Wholesale partnerships and licensees in travel retail, department and specialty stores
Global Footprint
- Americas, EMEA, Asia
- Revenue by region (FY 2025): Americas $2.48B; EMEA $1.30B; Asia $0.66B
Financial Highlights (FY 2025 vs. FY 2024)
| Metric | FY 2025 | FY 2024 | Change |
|---|---|---|---|
| Total revenue | $4,442 million | $5,170 million | –14.1% |
| Gross profit margin | 63.6% | 64.6% | –100 bps |
| Selling, general & administrative | $2,581 million | $2,784 million | –7.3% |
| Operating (loss) | $(752) million | $(241) million | NM |
| Net (loss) attributable to Capri | $(1,182) million | $(229) million | NM |
| Net loss per diluted share | $(10.00) | $(1.96) | NM |
*NM = Not meaningful.
Key Drivers of the FY 2025 Results
- Demand Softening in Luxury
Global fashion-luxury volumes declined 2% (per Bain & Altagamma). Shoppers traded down or paused purchases amid higher interest rates, inflation and geopolitical uncertainty. - Impairments and Asset Write-downs
- $430 million of goodwill impairment for Versace and Jimmy Choo reporting units
- $231 million of impairment on Versace and Jimmy Choo brand intangible assets
- $136 million of store-loss and other long-lived asset impairments
- Revenue Declines across All Brands
- Versace down 20%; Jimmy Choo down 2%; Michael Kors down 14% (all on both reported and constant-currency basis)
- Operating Leverage Erosion
Lower full-price sell-through and higher markdowns pushed gross margins down. Selling, general & administrative costs fell but not in line with revenue, squeezing operating margins. - Credit and Liquidity
- Net cash provided by operating activities: $281 million (FY 2024: $309 million)
- Total borrowings (Mar 29, 2025): $1.5 billion; net leverage covenant 4.0x
Balance Sheet & Liquidity
- Cash & cash equivalents: $166 million
- Working capital: $185 million
- Total assets: $5.21 billion
- Total debt: $1.50 billion
- Operating lease right-of-use assets: $1.21 billion
Capri refinanced its credit facilities in February 2025, locking in a lower interest margin on a $1.50 billion secured facility that matures between 2027 and 2029.
Strategic Priorities & Risks
Growth Strategy
- Michael Kors: Return to full-price growth; revamp hero styles; expand men’s and lifestyle categories to $4 billion in revenue over time.
- Jimmy Choo: Drive women’s accessories to 30% of revenue; leverage red-carpet and celebrity DNA; scale to $800 million.
- Versace: Up-market positioning with Italian couture DNA; focus on selective categories and wholesale license.
Global Optimization
- Store footprint rationalization; 83 closures in FY 2025; cost-saving restructuring levers.
- Enterprise-wide ERP transformation; digital platform upgrades; omni-channel distribution hubs.
Risks & Uncertainties
- Macroeconomic slowdown and consumer sentiment
- Foreign exchange headwinds
- Supply-chain disruption and tariffs on Asian production
- Cybersecurity, ESG, labor and ethical sourcing compliance
Investment Considerations
Despite iconic brand names and an extensive retail network, Capri faces a challenging backdrop:
- Sharp demand pullback in post-pandemic markets
- Heavy impairments and a net loss of over $1.1 billion
- Eroded profitability and strained operating leverage
- Ongoing multi-year capital investments in stores and IT
Capris turnaround hinges on improving sell-throughs, margin recovery and strict cost discipline. For patient, high-risk investors who believe in the long-term strength of these heritage luxury brands, there may be opportunity—but near-term headwinds are significant.
Net Loss for FY 2025
$ (1,182) million