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Capri Holdings (CPRI) Q3 Earnings Beat Estimates, Sales Miss
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Capri Holdings Limited (CPRI - Free Report) reported mixed results for third-quarter fiscal 2021, wherein the bottom line beat the Zacks Consensus Estimate while the top line missed the same. Also, the top and the bottom line declined from the year-ago quarter levels.
Nevertheless, management indicated that e-commerce operations were strong in the reported quarter, increasing 65% on a sequential basis. Further, it witnessed positive retail sales in Asia at all luxury houses, driven by strong growth in Mainland China.
Let’s Delve Deep
This designer, marketer, distributor and retailer of branded apparel and accessories reported adjusted quarterly earnings of $1.65 per share that surpassed the Zacks Consensus Estimate of $1.04. However, the bottom line dipped nearly 0.6% from $1.66 reported in the year-ago quarter.
Revenues came in at $1,302 million, which lagged the Zacks Consensus Estimate of $1,338 million. Moreover, the top line declined 17.1% from the prior-year quarter. On a constant-currency basis, total revenues were down 19.5%. Nonetheless, the rate of revenue decline decelerated on a sequential basis.
The top line includes revenue contribution of $986 million from Michael Kors, down 18.6% year on year. Revenues from Jimmy Choo amounted to $121 million, down 26.7% year over year. Revenues from Versace were $195 million, flat with the prior-year quarter levels.
Adjusted gross profit fell 9.7% year over year to $843 million. Nevertheless, adjusted gross margin expanded 520 basis points (bps) to 64.7%. The company reported adjusted operating income of $257 million, which reflected a decline of 2.7%, while adjusted operating margin expanded 290 bps to 19.7%.
The company is pleased with its third-quarter results, with revenues surpassing management’s expectations. Additionally, the company is on track with innovations to attract new customers across brands and drive double-digit growth in customer databases. Management is also encouraged about the outlook for the fashion luxury industry. In fact, it expects revenue and earnings per share to surpass the pre-pandemic levels by fiscal 2023.
However, management refrained from providing any guidance for fiscal 2021 owing to lack of visibility regarding macroeconomic fundamentals and tourism flows amid the pandemic situation.
Other Details
Capri Holdings ended third-quarter fiscal 2021 with cash and cash equivalents of $229 million, net receivables of $369 million, long-term debt of $1,243 million and shareholders’ equity of $2,355 million. Total inventory at the end of the quarter under review was $789 million, down 18% year over year.
As of Dec 26, 2020, the company had 1,279 retail stores, which included 831 Michael Kors stores, 231 Jimmy Choo stores and 217 Versace stores.
Over the past three months, this Zacks Rank #2 (Buy) stock has surged 83.5% compared with the industry’s rise of 50.3%.
Ross Stores (ROST - Free Report) has a long-term earnings growth rate of 10%. Currently, it carries a Zacks Rank #2.
Target (TGT - Free Report) , with a Zacks Rank #2, has a long-term earnings growth rate of 8.5%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Capri Holdings (CPRI) Q3 Earnings Beat Estimates, Sales Miss
Capri Holdings Limited (CPRI - Free Report) reported mixed results for third-quarter fiscal 2021, wherein the bottom line beat the Zacks Consensus Estimate while the top line missed the same. Also, the top and the bottom line declined from the year-ago quarter levels.
Nevertheless, management indicated that e-commerce operations were strong in the reported quarter, increasing 65% on a sequential basis. Further, it witnessed positive retail sales in Asia at all luxury houses, driven by strong growth in Mainland China.
Let’s Delve Deep
This designer, marketer, distributor and retailer of branded apparel and accessories reported adjusted quarterly earnings of $1.65 per share that surpassed the Zacks Consensus Estimate of $1.04. However, the bottom line dipped nearly 0.6% from $1.66 reported in the year-ago quarter.
Revenues came in at $1,302 million, which lagged the Zacks Consensus Estimate of $1,338 million. Moreover, the top line declined 17.1% from the prior-year quarter. On a constant-currency basis, total revenues were down 19.5%. Nonetheless, the rate of revenue decline decelerated on a sequential basis.
The top line includes revenue contribution of $986 million from Michael Kors, down 18.6% year on year. Revenues from Jimmy Choo amounted to $121 million, down 26.7% year over year. Revenues from Versace were $195 million, flat with the prior-year quarter levels.
Adjusted gross profit fell 9.7% year over year to $843 million. Nevertheless, adjusted gross margin expanded 520 basis points (bps) to 64.7%. The company reported adjusted operating income of $257 million, which reflected a decline of 2.7%, while adjusted operating margin expanded 290 bps to 19.7%.
The company is pleased with its third-quarter results, with revenues surpassing management’s expectations. Additionally, the company is on track with innovations to attract new customers across brands and drive double-digit growth in customer databases. Management is also encouraged about the outlook for the fashion luxury industry. In fact, it expects revenue and earnings per share to surpass the pre-pandemic levels by fiscal 2023.
However, management refrained from providing any guidance for fiscal 2021 owing to lack of visibility regarding macroeconomic fundamentals and tourism flows amid the pandemic situation.
Other Details
Capri Holdings ended third-quarter fiscal 2021 with cash and cash equivalents of $229 million, net receivables of $369 million, long-term debt of $1,243 million and shareholders’ equity of $2,355 million. Total inventory at the end of the quarter under review was $789 million, down 18% year over year.
As of Dec 26, 2020, the company had 1,279 retail stores, which included 831 Michael Kors stores, 231 Jimmy Choo stores and 217 Versace stores.
Over the past three months, this Zacks Rank #2 (Buy) stock has surged 83.5% compared with the industry’s rise of 50.3%.
Check These 3 Trending Picks Too
Tapestry (TPR - Free Report) , a Zacks Rank #1 (Strong Buy) stock, has a trailing four-quarter earnings surprise of 38.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ross Stores (ROST - Free Report) has a long-term earnings growth rate of 10%. Currently, it carries a Zacks Rank #2.
Target (TGT - Free Report) , with a Zacks Rank #2, has a long-term earnings growth rate of 8.5%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>