GICS Sector : Consumer Cyclical
Capri Holdings Limited designs, markets, distributes, and retails branded women's and men's apparel, footwear, and accessories in the United States, Canada, Latin America, Europe, the Middle East, Africa, and Asia.It operates through three segments: Versace, Jimmy Choo, and Michael Kors.The company offers ready-to-wear, accessories, footwear, handbags, scarves and belts, small leather goods, eyewear, watches, jewelry, fragrances, and home furnishings through a distribution network, including boutiques, department, and specialty stores, as well as through e-commerce sites.
Capri Holdings reported a revenue decline of 2.5% year-over-year, but exceeded expectations, driven by better-than-anticipated performance at Michael Kors. The company's gross margin and operating income improved sequentially, but were negatively impacted by a higher-than-anticipated effective tax rate. EPS came in at -$0.03, relative to estimates of $0.14. The company's tax rate was 112%, primarily due to being in a valuation allowance position.
Publication Date: Nov -14
Michael Kors saw a 9% year-over-year increase in its global consumer database, with revenue growth driven by exciting on-trend fashion and advanced data analytics. Jimmy Choo's revenue decreased 6% on a reported basis, but retail sales improved sequentially, and the company is focused on expanding its casual footwear offering. The company's strategic pricing architecture is helping to offset price sensitivity from Gen Z consumers.
The company reiterated its prior full-year guidance, with revenue between $3.375 billion and $3.45 billion. For FY2027, the company expects to return to revenue and earnings growth, with gross margin expansion and operating expense leverage on higher revenue. The guidance for the back half of the year is for sequential improvement, not positive territory. Analysts estimate next year's revenue growth at -21.6%.
With a P/E Ratio of -2.21, P/B Ratio of -35.0, and P/S Ratio of 0.65, the market is pricing in significant challenges for the company. The EV/EBITDA ratio of 19.11 suggests that the company's enterprise value is relatively high compared to its EBITDA. The Net Debt / EBITDA ratio of 9.88 indicates a significant debt burden. ROE and ROIC are both negative, indicating poor profitability.
The company expects an unmitigated tariff impact of approximately $85 million for the full year, with a greater impact in Q3. The company is focused on offsetting the tariff impact through strategic initiatives, including driving higher full price sell-throughs and higher AURs. The company's inventories are down in units, despite being up in dollars due to foreign exchange and tariffs.
Fisher Asset Management LLC Purchases 667,116 Shares of Capri Holdings Limited $CPRI
Dec -04
Capri Holdings Limited (CPRI) Presents at Morgan Stanley Global Consumer & Retail Conference 2025 Transcript
Dec -04
Market Today: Fed hopes lift stocks; AWS AI rollout; Prada-Versace deal
Dec -03
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Dec -03
Financial Review: Torrid (NYSE:CURV) versus Capri (NYSE:CPRI)
Dec -03
First Look: Versace deal, crypto slump, WBD bids and Airbus woes
Dec -02
Capri Holdings Completes Sale of Versace
Dec -02
Capri Holdings Limited Announces Participation in the Morgan Stanley Global Consumer and Retail Conference
Dec -01
Michael Kors' 5.4% growth is driven by strategic brand revitalization, expanded e-commerce capabilities, and increased marketing efforts. Additionally, the brand's focus on accessories and footwear, which are higher-margin categories, has contributed to its growth. Furthermore, Capri Holdings' efforts to improve operational efficiency and reduce costs have also positively impacted the brand's performance.
Versace's 5.4% growth is driven by strong brand momentum, increased wholesale and e-commerce sales, and strategic expansion into Asia. The brand's refreshed product lines, enhanced marketing efforts, and celebrity endorsements have also contributed to its growth. Additionally, Capri Holdings' focus on omnichannel retailing and investment in digital capabilities have further boosted Versace's sales.
Jimmy Choo's 5.4% growth is driven by strong brand recognition, increased online presence, and strategic expansion in Asia. The brand's focus on luxury footwear and accessories, particularly in the high-growth sneaker market, has also contributed to its growth. Additionally, Capri Holdings' efforts to revamp Jimmy Choo's brand image and improve operational efficiency have positively impacted sales.
Luxury fashion brand offering accessories, footwear, and apparel for men and women
Italian luxury fashion brand providing high-end clothing, shoes, handbags, and accessories
Luxury footwear and accessories brand offering high-end shoes, handbags, and small leather goods
The threat of substitutes for Capri Holdings Limited is medium due to the presence of alternative luxury fashion brands and online marketplaces that offer similar products.
The bargaining power of customers is high due to the availability of multiple luxury fashion brands and online marketplaces, giving customers the power to choose from a wide range of options.
The bargaining power of suppliers is low due to the company's strong relationships with suppliers and its ability to negotiate prices and terms.
The threat of new entrants is low due to the high barriers to entry in the luxury fashion industry, including the need for significant capital investment and established relationships with suppliers and distributors.
The intensity of rivalry is high due to the presence of established luxury fashion brands and the increasing competition from online marketplaces and new entrants.
| Value | |
|---|---|
| Debt Weight | 66.10% |
| Debt Cost | 3.95% |
| Equity Weight | 33.90% |
| Equity Cost | 14.39% |
| WACC | 7.49% |
| Leverage | 195.02% |
Value: 4.9
Growth: 7.4
Quality: 7.1
Yield: 4.4
Momentum: 2.5
Volatility: 3.3
1-Year Total Return ->
Value: 8.1
Growth: 7.0
Quality: 5.0
Yield: 0.6
Momentum: 2.0
Volatility: 2.0
1-Year Total Return ->
Value: 5.5
Growth: 1.7
Quality: 4.6
Yield: 5.0
Momentum: 2.5
Volatility: 5.3
1-Year Total Return ->
Value: 4.0
Growth: 1.9
Quality: 2.2
Yield: 3.8
Momentum: 9.5
Volatility: 1.7
1-Year Total Return ->
Value: 1.1
Growth: 7.8
Quality: 5.0
Yield: 1.2
Momentum: 4.0
Volatility: 3.7
1-Year Total Return ->
Value: 6.3
Growth: 1.4
Quality: 2.4
Yield: 0.0
Momentum: 0.5
Volatility: 0.3
1-Year Total Return ->