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Capri Holdings (CPRI)
NYSE:CPRI

Capri Holdings (CPRI) AI Stock Analysis

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Capri Holdings

(NYSE:CPRI)

Rating:49Neutral
Price Target:
Capri Holdings faces significant financial and operational challenges, with declining revenue and profitability. Technical indicators point to bearish momentum, while the valuation remains unattractive. Recent strategic moves, such as the sale of Versace and securing a credit facility, provide some positive outlook, but the near-term risks weigh heavily on the overall score.
Positive Factors
Brand Performance
Michael Kors' revenue beat expectations and its brand is experiencing an inflection in brand heat and purchase intent.
Cost Management
Management is working on mitigating tariff impacts through sourcing diversification, cost efficiencies, and price increases.
Debt Reduction
Funds from the Versace sale will be used to pay off net debt, virtually eliminating interest expenses, and support a share repurchase program.
Negative Factors
Financial Guidance
The company has cut its F26 guidance due to tariff pressure, indicating potential challenges in the near-term fundamentals.
Operating Margins
Cost cutting benefits have been overshadowed by sales declines, resulting in a negative impact on operating margins.
Revenue Decline
Management's outlined expectations for Michael Kors revenues are down 7.2% YOY at the midpoint, and Jimmy Choo revenues are down 9.9% YOY at the midpoint.

Capri Holdings (CPRI) vs. SPDR S&P 500 ETF (SPY)

Capri Holdings Business Overview & Revenue Model

Company DescriptionCapri 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. It also licenses Versace brand name and trademarks to third parties to retail and/or wholesale its products; and has licensing agreements to the manufacture and sale of jeans, fragrances, watches, eyewear, and home furnishings. The company was formerly known as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited in December 2018. Capri Holdings Limited was founded in 1981 and is headquartered in London, the United Kingdom.
How the Company Makes MoneyCapri Holdings generates revenue primarily through the sale of luxury goods under its three flagship brands: Versace, Jimmy Choo, and Michael Kors. The company operates through retail stores, e-commerce platforms, and wholesale partnerships. Revenue streams include direct sales to consumers via branded retail stores and online channels, as well as wholesale distribution to high-end department stores and specialty retailers. Additionally, Capri Holdings benefits from licensing agreements and collaborations that expand its product offerings and brand reach. The company's earnings are significantly influenced by brand strength, global market presence, and strategic marketing initiatives aimed at enhancing brand visibility and consumer engagement.

Capri Holdings Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q4-2025)
|
% Change Since: -0.85%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment, with significant strides being made in brand engagement and strategic initiatives at Michael Kors and Jimmy Choo. However, these positive aspects were offset by substantial revenue declines, a current net loss, and challenges related to tariffs and the Asian market.
Q4-2025 Updates
Positive Updates
Sale of Versace to Prada Group
Capri Holdings announced the pending sale of Versace to Prada Group, which will help reduce debt levels and potentially reinstate a share repurchase program. This transaction is expected to strengthen the company's financial foundation and refocus resources on Michael Kors and Jimmy Choo.
Positive Trends at Michael Kors
Despite a 16% revenue decline, Michael Kors showed signs of improvement with a 10% year-over-year increase in its global consumer database and a sequential improvement in March that continued into the first quarter. New storytelling and product initiatives are beginning to resonate with consumers.
Growth in Jimmy Choo Accessories
Jimmy Choo saw strong performance in new accessory styles, including its fastest-selling day bag in five years. The brand's global consumer database increased by 11% year-over-year.
Improvement in Full-Price Sales
Michael Kors experienced strong full-price sell-throughs in new accessories groups, with positive responses from consumers. The brand saw an increase in average unit retail (AUR) in full-price retail stores.
Negative Updates
Overall Revenue Decline
Capri Holdings reported a 15% decrease in overall revenue, with Michael Kors down 16% and Jimmy Choo down 3%. The decline was attributed to softening demand for luxury goods and store closures.
Net Loss and Operating Loss
The company reported a net loss of $581 million and an operating loss of $33 million. The net loss was primarily due to a non-cash tax valuation allowance.
Challenges in Asia
Revenue in Asia decreased significantly, with a 31% decline for Michael Kors and a 16% decline for Jimmy Choo.
Tariff Impact
The company expects tariffs to increase the cost of goods sold by approximately $60 million in fiscal 2026, affecting gross margins.
Company Guidance
During the earnings call for Capri Holdings Limited, the company provided guidance focusing on strategic initiatives for fiscal 2026 and beyond, following the pending sale of Versace. The guidance excluded Versace's impact, as it will be classified as a discontinued operation. Capri Holdings anticipates fiscal 2026 revenue to be between $3.3 and $3.4 billion, with Michael Kors generating $2.75 to $2.85 billion and Jimmy Choo $540 to $550 million. They expect gross margins of 61% to 61.5%, operating income around $100 million, and diluted earnings per share between $1.20 and $1.40. The company plans to reduce debt significantly using proceeds from the Versace sale, aiming for minimal net debt. Strategic efforts include expanding Michael Kors' brand desirability and product offerings, increasing Jimmy Choo's accessory sales, and improving store productivity. Despite a challenging macro environment, Capri Holdings is optimistic about growth prospects for fiscal 2027 and 2028, targeting Michael Kors revenue of $4 billion and Jimmy Choo $800 million, with double-digit operating margins.

Capri Holdings Financial Statement Overview

Summary
Capri Holdings faces significant financial challenges, with declining revenues and profitability impacting both the income statement and cash flow metrics. Despite maintaining positive cash flow, the company's high leverage and negative profitability metrics raise concerns.
Income Statement
45
Neutral
Capri Holdings has experienced a notable decline in both revenue and profitability. The TTM (Trailing-Twelve-Months) figures show a gross profit margin of 62.8% and a significant negative net profit margin of -21.8%, indicating high costs relative to revenue. The EBIT and EBITDA margins are negative, reflecting operational challenges. Revenue growth has been inconsistent, with recent periods showing declines, which raises concerns about the company's ability to sustain growth in a competitive retail environment.
Balance Sheet
55
Neutral
The balance sheet reflects moderate leverage with a debt-to-equity ratio of 2.92 in the TTM, indicating potential financial risk if earnings do not improve. The equity ratio stands at 18.1%, suggesting a relatively low proportion of equity in asset financing. Return on equity is negative at -94.5% in the TTM, highlighting profitability challenges. Despite these concerns, the company's asset base provides some stability.
Cash Flow
60
Neutral
Capri Holdings maintains a positive operating cash flow, with an operating cash flow to net income ratio of -0.48 in the TTM, indicating efficient cash generation despite net losses. The free cash flow growth rate shows improvement, and the free cash flow to net income ratio is -0.33, reflecting robust cash flow management. However, the negative ratios highlight ongoing profitability issues impacting cash flow generation.
Breakdown
TTMMar 2024Jun 2023Jun 2022Mar 2021Mar 2020
Income StatementTotal Revenue
4.63B5.17B5.62B5.65B4.06B5.55B
Gross Profit
2.86B3.34B3.72B3.74B2.60B3.27B
EBIT
-603.00M-241.00M510.00M718.00M19.00M-192.00M
EBITDA
-403.00M575.00M1.00B1.19B258.00M52.00M
Net Income Common Stockholders
-1.01B-229.00M616.00M822.00M-63.00M-225.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
356.00M199.00M249.00M169.00M232.00M592.00M
Total Assets
5.91B6.69B7.29B7.48B7.48B7.95B
Total Debt
3.12B3.58B3.60B3.04B3.45B4.37B
Net Debt
2.76B3.38B3.35B2.87B3.21B3.77B
Total Liabilities
4.83B5.09B5.45B4.92B5.32B5.78B
Stockholders Equity
1.07B1.60B1.85B2.56B2.16B2.17B
Cash FlowFree Cash Flow
334.84M120.00M545.00M573.00M513.00M636.00M
Operating Cash Flow
485.68M309.00M771.00M704.00M624.00M859.00M
Investing Cash Flow
-63.82M-135.00M183.00M58.00M-124.00M62.00M
Financing Cash Flow
-303.90M-208.00M-776.00M-800.00M-870.00M-497.00M

Capri Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price17.40
Price Trends
50DMA
16.74
Positive
100DMA
19.59
Negative
200DMA
24.86
Negative
Market Momentum
MACD
0.38
Negative
RSI
50.91
Neutral
STOCH
50.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPRI, the sentiment is Negative. The current price of 17.4 is below the 20-day moving average (MA) of 17.53, above the 50-day MA of 16.74, and below the 200-day MA of 24.86, indicating a neutral trend. The MACD of 0.38 indicates Negative momentum. The RSI at 50.91 is Neutral, neither overbought nor oversold. The STOCH value of 50.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CPRI.

Capri Holdings Risk Analysis

Capri Holdings disclosed 45 risk factors in its most recent earnings report. Capri Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
We are subject to shareholder litigation relating to the terminated Merger. Q4, 2024
2.
We may incur significant goodwill and/or intangible asset impairment charges with respect to one or more of our brands which could have a material adverse impact on our results of operations and financial condition. Q4, 2024

Capri Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TPTPR
76
Outperform
$16.31B20.6740.27%1.78%2.67%1.31%
MOMOV
68
Neutral
$256.88M20.133.67%8.64%-1.36%-54.97%
SISIG
65
Neutral
$2.75B5.562.62%1.79%-6.52%-104.24%
63
Neutral
$793.83M-8.75%7.08%-42.22%
62
Neutral
$6.90B11.122.92%3.89%2.68%-25.06%
49
Neutral
$2.14B-120.18%-12.34%-574.65%
47
Neutral
$331.27M-195.94%-22.86%-38.76%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CPRI
Capri Holdings
17.40
-16.44
-48.58%
TPR
Tapestry
78.56
36.62
87.32%
MOV
Movado Group
16.28
-7.84
-32.50%
SIG
Signet Jewelers
66.81
-38.75
-36.71%
LUXE
LuxExperience
9.31
3.90
72.09%
LANV
Lanvin Group Holdings
2.37
0.81
51.92%

Capri Holdings Corporate Events

M&A TransactionsBusiness Operations and Strategy
Capri Holdings Sells Versace to Prada for $1.375B
Positive
Apr 10, 2025

On April 10, 2025, Capri Holdings announced a definitive agreement to sell its Versace business to Prada S.p.A. for $1.375 billion in cash. The transaction, expected to close in the second half of 2025, aims to strengthen Capri’s balance sheet and enable strategic investments in its other brands, Michael Kors and Jimmy Choo. This move is part of Capri’s strategy to increase shareholder value and focus on long-term growth for its remaining brands.

Spark’s Take on CPRI Stock

According to Spark, TipRanks’ AI Analyst, CPRI is a Neutral.

Capri Holdings faces significant financial and operational challenges, reflected in its declining revenue and profitability. While the company is implementing strategic initiatives and enhancing financial flexibility, the current bearish technical indicators and negative valuation metrics suggest a cautious outlook. The company’s efforts to stabilize and eventually return to growth are positive but are overshadowed by near-term risks.

To see Spark’s full report on CPRI stock, click here.

Executive/Board ChangesBusiness Operations and Strategy
Capri Holdings CFO Thomas Edwards Announces Resignation
Neutral
Apr 1, 2025

On March 27, 2025, Thomas J. Edwards, Jr., the Executive Vice President, Chief Financial Officer, and Chief Operating Officer of Capri Holdings, announced his resignation effective June 20, 2025, to pursue another opportunity. His departure is not due to any disagreements with the company’s operations or policies. Rajal Mehta, who has been with the company for 16 years and is currently the Chief Financial Officer of the Michael Kors brand, will serve as Interim CFO. This transition is expected to maintain continuity and stability within Capri Holdings’ financial operations, as the company continues to focus on its growth strategies.

Business Operations and StrategyFinancial Disclosures
Capri Holdings Announce New Long-Term Financial Targets
Positive
Feb 19, 2025

On February 19, 2025, Capri Holdings Limited held its Investor Day in New York City, where it announced new long-term financial targets. The company expressed optimism about the growth potential of its brands, Versace, Jimmy Choo, and Michael Kors, as it pursues strategic initiatives. Capri Holdings highlighted that its powerful brands have enduring value and resilience, which it expects to drive revenue and earnings growth over time. The guidance provided is based on adjusted, non-GAAP measures and is subject to external factors such as global economic conditions and currency fluctuations.

Private Placements and FinancingBusiness Operations and Strategy
Capri Holdings Secures $2.2 Billion Credit Facility
Positive
Feb 4, 2025

On February 4, 2025, Capri Holdings Limited finalized an amended and restated credit agreement, establishing a $2.2 billion senior secured credit facility with JPMorgan Chase Bank among others. The facility includes a $700 million term loan and a $1.5 billion revolving credit line, maturing in July 2027, and aims to support the company’s operations through repaying existing debts and financing general corporate needs. This strategic financial restructuring enhances Capri Holdings’ liquidity and financial flexibility, potentially strengthening its position in the market.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.