Shares of Capri Holdings were under pressure in early trading on Wednesday as lower inventory and weakness stemming from the U.S. war with Iran hit the Michael Kors business and pushed down the company’s revenue outlook for the year, even after a stronger-than-expected first quarter. 

Shares of Capri, which also owns Jimmy Choo, fell 2 percent to $16.18 in premarket trading as investors weighed the new outlook. 

“As we look at the balance of fiscal 2027 we expect Jimmy Choo to continue to grow and return to profitability,” said John D. Idol, chairman and chief executive officer. “At Michael Kors certain headwinds including lower than anticipated inventory levels in the second quarter, softer trends in EMEA and updated foreign currency exchange rate assumptions are impacting our revenue outlook. 

“As a result we now expect fiscal 2027 revenue of approximately $3.4 billion,” he said. “Based on our revised revenue expectations we are taking actions to reduce operating expenses which are enabling us to maintain our fiscal 2027 earnings per share outlook of approximately $2.15, representing 40 percent growth over the prior year.”

That shaves about $125 million in revenues off the guidance the company gave in May. On Wednesday, Capri said it expected roughly $50 million in reduced sales due to inventory delays, $50 million from softer trends in EMEA and $35 million from currency headwinds. 

The outlook amounted to a splash of cold water after a better run for the first quarter ended June 27. 

Net income rose to $69 million from $53 million and adjusted earnings per share came in at 67 cents, well above the 40 cents analysts forecast, according to Yahoo Finance. 

Gross profit margins stood at 65 percent, up 200 basis points from a year earlier due to higher full-price sell-throughs and lower tariff rates.

Revenues for the first quarter tallied $769 million, down 4.1 percent in constant currencies, better than the $752.6 million analysts had penciled in. Michael Kors’ revenues fell 7.6 percent in constant currencies, while Jimmy Choo increased 9.3 percent.

Inventories at the end of the quarter were down 20 percent from a year earlier.