Capri Holdings Limited

Greetings and welcome to the Capri Holdings Limited First Quarter Fiscal 2026 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to your host Jennifer Davis. Please go ahead.

Good morning everyone and thank you for joining us on Capri Holding Limited First Quarter Fiscal 2026 Conference Call. With me this morning are Chairman and Chief Executive Officer John Idle and Interim Chief Financial Officer Raj Mehta. Before we begin let me remind you that certain statements made on today's call may constitute forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ from those we expect. Those risks and uncertainties are described in today's press release and in the company's SEC filings which are available on the company's website. Investors should not assume that the statements made during this call will remain operative at a later time and the company undertakes no obligation to update any information discussed on today's call. Unless otherwise noted all financial information on today's call will be presented on a non-GAT basis. These non-GAT measures exclude certain costs associated with Capri transformation costs, restructuring and other charges and transaction related costs. To view the corresponding GAT measures and related reconciliation please view our latest earnings release posted to our website earlier today at capriholdings.com. Additionally the company has classified the results of operations and cash flows of its Versace business as discontinued operations. Unless otherwise noted all information on today's call relates only to continuing operations. I would also like to note that in today's 8k we included supplemental quarterly segment data for fiscal 2025. Now I would like to turn the call over to Mr. John Idle, chairman and chief executive officer. John.

Thank you Jennifer and good morning everyone. We are encouraged by our first quarter results. Trends improved sequentially leading to both revenue and earnings per share that exceeded our expectations. This performance demonstrates the progress we are making as we execute against our strategic initiatives to re-energize our fashion luxury houses. While still early we are beginning to see signs that our strategies are working. Although the global macroeconomic environment remains dynamic we are on track to stabilize our business this year while establishing a strong foundation for a return to growth in fiscal 27. Now looking at our first quarter results total company revenue decreased 6% versus last year to 797 million on a reported basis and earnings per share were 50 cents. Our results reflected a sequential improvement in trends across all regions. At Michael Kors first quarter revenue decreased 6% on a reported basis compared to prior year with similar trends in both retail and wholesale. In our retail channel we are starting to see encouraging signs of momentum. First traffic trends in our full price stores improved sequentially. Second we achieved stronger full price sell-throughs on new styles and third AUR trends continued to improve sequentially turning positive in our full price channel for the first time in three years. We view these as early but meaningful indicators that our strategies are gaining traction. In the wholesale channel performance at point of sale improved sequentially. Wholesale shipments also saw a sequential improvement versus prior quarter but continue to be impacted by the broad-based softness in the channel as well as our prior initiatives to reduce wholesale exposure. As a point of reference we have exited 30% of U.S. department store doors over the past year. We anticipate the majority of wholesale door reductions will be completed by the end of the year. Now turning to brand awareness and consumer engagement. We saw continued positive consumer response to our hotel story series underscoring the appeal of our compelling fashion and travel storytelling approach. The first chapter of hotel stories took place in Ibiza at the Matasol Hotel featuring English actress and singer Suki Waterhouse. The narrative captured exciting fashion moments in Ibiza and at the hotel while celebrating the joy of traveling the world in style. As we look ahead to fall the next chapter of hotel stories will take place in Rome capturing the glamour of the season through the lens of fashion and culture. During the first quarter we built upon the hotel stories narrative by broadening our reach with local activations and an expanded network of influencers. We have pivoted our approach to better leverage the power of social media platforms and influencer partnerships to not only engage with consumers whenever and wherever they are but also to deliver our story through trusted voices in fashion. By aligning with relevant influencers and celebrities we are creating more authentic brand moments that resonate with our consumers. We believe our travel the world in style brand vision combined with our expanded network of influencers is helping us to reignite brand desirability. According to our consumer insights we have seen a further positive shift in brand affinity signaling that our strategies are resonating. Looking ahead to the fall we plan to build on this momentum with an expanded influencer strategy designed to not only further extend our reach and deeper consumer engagement but also drive incremental revenue growth. Additionally Michael Kors once again had a strong presence at the Met Gala with a number of celebrities wearing Michael's tailored sophisticated styles. The event highlighted Michael's leadership in the world of fashion and drove strong consumer engagement generating nearly six billion impressions. The combined power of our hotel stories narratives global events activations and influencer partnerships helped amplify our reach enhanced by the utilization of our advanced data analytics capabilities. These efforts contributed to a nine percent -over-year increase in Michael Kors global database. Our data analytics capabilities are reshaping the way we approach marketing enabling us to develop deeper consumer understandings anticipate behavior and make more informed strategic decisions. Now turning to product our strategy is centered around Michael's design vision delivering exciting fashion with standout style. We have also adjusted our pricing architecture to align with historic levels. In accessories consumers continue to respond positively to new introductions that celebrate our iconic brand codes and align with our new strategic pricing architecture. Groups including Leila, Nalita, and Bryant are experiencing strong full price sell-throughs and contributed to a sequential improvement in accessories AURs. Additionally we saw continued growth in our iconic signature styles reinforcing their appeal with consumers. Turning to footwear revenue was down double digits during the quarter driven by a sequential decline in the dress category. Casual styles continued to perform better. During the quarter we began introducing new styles that embody iconic Michael Kors branding elements and heritage design details. Early performance of these styles has been strong and we are expanding the assortment to build on this momentum. Looking at -to-wear revenues increased driven by higher AURs as consumers responded to styles reflecting Michael's effortless glamour and timeless sophistication. Turning to men's revenue was approximately flat. AURs in our full price channel were up and improved sequentially. Consumers responded positively to the latest men's sportswear styles which reflect the brand's modern jet set lifestyle. Next I'd like to review our fleet optimization program. Our retail stores remain a critical pillar in supporting our sales recovery and we believe our global store renovation program will play a pivotal role in elevating the overall consumer experience and revitalizing Michael Kors sales trajectory. Over the next three years we plan to renovate approximately 50 percent of our store fleet as well as key department store locations. We believe that our renovation program will drive higher store productivity and we look forward to sharing our progress and results with you in the future. Additionally we remain on track to close 75 underproductive Michael Kors stores in fiscal 26. Following these closures our store rationalization program will be largely complete. Looking forward Michael Kors is a powerful fashion luxury brand with a 44-year heritage that continues to resonate with consumers. Building on this legacy and guided by our data analytics and consumer insights we believe we have the right strategies underway to return the brand to growth and remain optimistic about our ability to achieve four billion in revenues over time. Now moving to Jimmy Choo which is an iconic brand with a sense of glamour and a playful daring spirit. We are focusing our initiatives to leverage the strength of this highly recognized luxury brand. First quarter revenue decreased six percent on a reported basis compared to prior year. Retail sales declined mid-single digits while wholesale declined double digits which was primarily due to shipment phasing. Looking at trends in our retail channel first quarter performance improved sequentially relative to the fourth quarter. Performance also improved sequentially as the quarter progressed driven by the successful launch of new product introductions. Importantly these styles are driving higher full price sell-throughs and AURs. In the wholesale channel revenue at point of sale improved sequentially and was flat in North American department stores indicating that our new product is resonating with consumers. Turning to brand awareness and consumer engagement our storytelling continues to focus on glamour inspiring joy and empowering confidence. For summer our initiatives emphasize new seasonal styles featuring American actress and fashion icon Chloe Seven Yee. In June Jimmy Choo named Chinese actress Bai Lu as its new Asia Pacific ambassador. Her debut campaign featured the launch of the new Curve Bag which she unveiled to her extensive fan base. As one of China's most followed actresses Bai Lu's involvement helped the campaign reach over 56 million consumers across social media channels in Asia Pacific alone. We also continue to extend our reach and deepen consumer engagement through high impact influencer partnerships that balance glamour with authenticity. By collaborating with style leaders and cultural tastemakers Jimmy Choo is crafting meaningful moments that resonate with consumers. The integration of our storytelling, global events, activations, influencer partnerships and client telling initiatives helped amplify our reach. Enhanced by our data analytics capabilities these efforts contributed to a 9% year over year increase in Jimmy Choo's global consumer database. Turning to product. Jimmy Choo's product strategy remains focused on further developing accessories and expanding our casual life. In accessories we are pleased with recent momentum driven by the continued strong sales of our bonbon and cinch bags. The cinch bag is now Jimmy Choo's best selling day bag of all time. Additionally towards the end of the quarter we introduced the Curve Group with styles priced between $5.95 and $9.95. While still early we are encouraged by the strong initial consumer response. We are equally pleased to see Curve attracting new consumers to the brand. In the fall we plan to introduce the Bar Group, an additional collection within this price range to capture a broader segment of luxury consumers. With our strong brand equity and design authority we believe Jimmy Choo is well positioned to capture share within this luxury price segment. We expect this initiative to drive significant growth in our accessories business over time. Turning to footwear. Our dress category remains soft. We are focused on bringing excitement to this assortment with innovation and animation. In May Jimmy Choo launched the archive collection, a curated edit of re-editioned footwear styles from the first five years of the house. By fusing nostalgia and discovery the collection resonated with a wide audience from original Jimmy Choo fans to millennials and gen Z's. The collection delivered strong sell-through rates while also generating over 50 million social media impressions highlighting its strong market reception and brand resonance. Jimmy Choo's strategy to expand day and casual footwear gained traction in the first quarter with an increase in full price sales. We continue to believe there is a meaningful opportunity to expand our offering. Active footwear sales in our full price channel increased mid single digits driven by strong demand for the VELUS and diamond flex sneakers. We are also expanding our casual assortments beyond active. For example in June we introduced the Jelly ballerina flat which blends nostalgic design with modern glamour. Priced at $395 the Jelly is experiencing extremely strong full price sell-throughs and attracting new customers to the brand. Looking forward we believe we are on the right path to unlock Jimmy Choo's unique potential by expanding its position within the world of fashion luxury and ultimately achieving our revenue target of 800 million dollars over time. In conclusion with the Versace transaction expected to close in the second half of calendar 2025 we are fully focused on energizing our two iconic brands Michael Kors and Jimmy Choo. We are pleased to see early indications that our strategic initiatives are beginning to work. Looking ahead we continue to expect trends to improve in the back half of fiscal 26 positioning us to return to growth in fiscal 27. Long term we remain optimistic about the sustainable growth potential of both Michael Kors and Jimmy Choo. Now Raj will review our first quarter results and guidance in more detail.