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Capri Holdings (CPRI) Up 4.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Capri Holdings (CPRI - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Capri Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Capri Holdings Q4 Earnings Beat Estimates, Fall Y/Y
Capri Holdings reported better-than-expected fourth-quarter fiscal 2023 results. However, the top and bottom lines declined on a year-over-year basis. A tough operating environment weighed on the company’s performance.
Capri Holdings provided its sales and earnings view for first-quarter fiscal 2024 and fiscal 2024. In the long run, the company remains optimistic about strength in its Versace, Jimmy Choo and Michael Kors brands along with the solid trends in Asia and continued growth in EMEA.
Let’s Delve Deeper
This designer, marketer, distributor and retailer of branded apparel and accessories posted adjusted quarterly earnings of 97 cents per share, which showcased a decline from the adjusted earnings of $1.02 reported in the year-ago period. However, its quarterly earnings surpassed the Zacks Consensus Estimate of 94 cents.
Total revenues of $1,335 million beat the Zacks Consensus Estimate of $1,275 million but decreased 10.5% year over year. On a constant-currency basis, total revenues declined 3%.
The adjusted gross profit decreased approximately 9.3% year over year to $863 million. However, the adjusted gross margin expanded 90 basis points (bps) to 64.6%.
The company reported an adjusted operating income of $121 million, down from $212 million in the prior year’s quarter. The operating margin shrunk by 510 bps to 9.1%.
Segment Details
Revenues from Versace decreased 13% year over year to $274 million during the quarter under discussion. The operating income was $14 million, down 72% year over year, while its margin contracted 1,080 bps to 5.1%.
Jimmy Choo’s revenues came in at $151 million, down 3.2% from the prior-year period. The operating loss was $7 million in the quarter compared with an operating loss of $15 million. The operating margin was 4.6% compared with 9.6% in the prior-year quarter.
Revenues from Michael Kors fell 10.9% year over year to $910 million. The operating income was $147 million, down 30% year-over-year, while its margin contracted 440 bps to 16.2%.
Other Details
Capri Holdings ended the quarter with cash and cash equivalents of $249 million, net receivables of $369 million, long-term debt of $1,822 million and total shareholders’ equity of $1,849 million. During the fourth quarter, the company repurchased roughly 8.5 million shares for approximately $400 million.
As of Apr 1, 2023, the company had 1,272 retail stores. These include 812 Michael Kors, 237 Jimmy Choo and 223 Versace stores.
Guidance
Capri Holdings estimates revenues of approximately $5.7 billion for fiscal 2024 compared with $5.8 billion projected earlier. This current view indicates an increase from $5.6 billion reported in fiscal 2023. Its guided earnings per share of approximately $6.40 is in line with its earlier projection. The current view indicates an increase from the adjusted earnings of $6.13 reported in fiscal 2023.
The Zacks Consensus Estimate for fiscal 2024 revenues and earnings currently stands at $5.6 billion and $6.09 per share, respectively. Management projected a modest gross margin expansion and an operating margin of approximately 16.5%.
The fiscal 2024 top-line projection assumes revenues of approximately $1.2 billion from Versace, $700 million from Jimmy Choo and $3.8 billion from Michael Kors. Management anticipates an operating margin in the mid-teens, high-single-digits and low-20% range for Versace, Jimmy Choo and Michael Kors, respectively, for the fiscal year.
Management envisions first-quarter fiscal 2024 revenues of roughly $1.2 billion. It projects earnings per share in the band of 70 cents compared with adjusted earnings of $1.50 reported in the first quarter of fiscal 2023. The company expects its operating margin to be approximately 8.5%.
For the first quarter of 2024, Capri Holdings anticipates revenues of approximately $245 million from Versace, $180 million from Jimmy Choo and $775 million from Michael Kors.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -50.09% due to these changes.
VGM Scores
At this time, Capri Holdings has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Capri Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Capri Holdings belongs to the Zacks Retail - Apparel and Shoes industry. Another stock from the same industry, American Eagle Outfitters (AEO - Free Report) , has gained 15.3% over the past month. More than a month has passed since the company reported results for the quarter ended April 2023.
American Eagle reported revenues of $1.08 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $0.17 for the same period compares with $0.16 a year ago.
American Eagle is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of +200%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.8%.
American Eagle has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Capri Holdings (CPRI) Up 4.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Capri Holdings (CPRI - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Capri Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Capri Holdings Q4 Earnings Beat Estimates, Fall Y/Y
Capri Holdings reported better-than-expected fourth-quarter fiscal 2023 results. However, the top and bottom lines declined on a year-over-year basis. A tough operating environment weighed on the company’s performance.
Capri Holdings provided its sales and earnings view for first-quarter fiscal 2024 and fiscal 2024. In the long run, the company remains optimistic about strength in its Versace, Jimmy Choo and Michael Kors brands along with the solid trends in Asia and continued growth in EMEA.
Let’s Delve Deeper
This designer, marketer, distributor and retailer of branded apparel and accessories posted adjusted quarterly earnings of 97 cents per share, which showcased a decline from the adjusted earnings of $1.02 reported in the year-ago period. However, its quarterly earnings surpassed the Zacks Consensus Estimate of 94 cents.
Total revenues of $1,335 million beat the Zacks Consensus Estimate of $1,275 million but decreased 10.5% year over year. On a constant-currency basis, total revenues declined 3%.
The adjusted gross profit decreased approximately 9.3% year over year to $863 million. However, the adjusted gross margin expanded 90 basis points (bps) to 64.6%.
The company reported an adjusted operating income of $121 million, down from $212 million in the prior year’s quarter. The operating margin shrunk by 510 bps to 9.1%.
Segment Details
Revenues from Versace decreased 13% year over year to $274 million during the quarter under discussion. The operating income was $14 million, down 72% year over year, while its margin contracted 1,080 bps to 5.1%.
Jimmy Choo’s revenues came in at $151 million, down 3.2% from the prior-year period. The operating loss was $7 million in the quarter compared with an operating loss of $15 million. The operating margin was 4.6% compared with 9.6% in the prior-year quarter.
Revenues from Michael Kors fell 10.9% year over year to $910 million. The operating income was $147 million, down 30% year-over-year, while its margin contracted 440 bps to 16.2%.
Other Details
Capri Holdings ended the quarter with cash and cash equivalents of $249 million, net receivables of $369 million, long-term debt of $1,822 million and total shareholders’ equity of $1,849 million. During the fourth quarter, the company repurchased roughly 8.5 million shares for approximately $400 million.
As of Apr 1, 2023, the company had 1,272 retail stores. These include 812 Michael Kors, 237 Jimmy Choo and 223 Versace stores.
Guidance
Capri Holdings estimates revenues of approximately $5.7 billion for fiscal 2024 compared with $5.8 billion projected earlier. This current view indicates an increase from $5.6 billion reported in fiscal 2023. Its guided earnings per share of approximately $6.40 is in line with its earlier projection. The current view indicates an increase from the adjusted earnings of $6.13 reported in fiscal 2023.
The Zacks Consensus Estimate for fiscal 2024 revenues and earnings currently stands at $5.6 billion and $6.09 per share, respectively. Management projected a modest gross margin expansion and an operating margin of approximately 16.5%.
The fiscal 2024 top-line projection assumes revenues of approximately $1.2 billion from Versace, $700 million from Jimmy Choo and $3.8 billion from Michael Kors. Management anticipates an operating margin in the mid-teens, high-single-digits and low-20% range for Versace, Jimmy Choo and Michael Kors, respectively, for the fiscal year.
Management envisions first-quarter fiscal 2024 revenues of roughly $1.2 billion. It projects earnings per share in the band of 70 cents compared with adjusted earnings of $1.50 reported in the first quarter of fiscal 2023. The company expects its operating margin to be approximately 8.5%.
For the first quarter of 2024, Capri Holdings anticipates revenues of approximately $245 million from Versace, $180 million from Jimmy Choo and $775 million from Michael Kors.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -50.09% due to these changes.
VGM Scores
At this time, Capri Holdings has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Capri Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Capri Holdings belongs to the Zacks Retail - Apparel and Shoes industry. Another stock from the same industry, American Eagle Outfitters (AEO - Free Report) , has gained 15.3% over the past month. More than a month has passed since the company reported results for the quarter ended April 2023.
American Eagle reported revenues of $1.08 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $0.17 for the same period compares with $0.16 a year ago.
American Eagle is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of +200%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.8%.
American Eagle has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.