Capri Holdings Ltd (CPRI) shares surged 8.69% in pre-market trading on Tuesday, following the company's announcement of a $1 billion share repurchase program and the release of its second-quarter fiscal 2026 results that exceeded analyst expectations in key areas.

The luxury fashion group, which owns brands such as Michael Kors, Versace, and Jimmy Choo, reported Q2 revenue of $856 million, surpassing the IBES estimate of $824.6 million. Despite representing a 2.5% year-over-year decline on a reported basis, the better-than-anticipated top-line performance likely boosted investor confidence. Additionally, Capri's adjusted operating income for the quarter came in at $20 million, nearly doubling the IBES estimate of $10.7 million.

However, the company's results were mixed overall. Capri posted a Q2 adjusted loss per share of $0.03, compared to the IBES estimate of $0.13 earnings per share. The reported operating loss stood at $12 million, with an adjusted operating margin of 2.3%. Despite these challenges, the announcement of a substantial $1 billion share repurchase program appears to have overshadowed the negatives, signaling management's confidence in the company's long-term prospects and commitment to enhancing shareholder value. This strategic move, combined with the revenue and operating income beats, seems to be the primary driver behind the significant pre-market stock price surge.