Macroeconomic Impact - Capri Holdings Limited reported a significant impact from macroeconomic pressures, which could adversely affect consumer spending and overall financial performance [16]. - The business is heavily influenced by macroeconomic cycles affecting consumer spending, which could materially impact results if prolonged depressed spending occurs [20]. Competition - The company is facing increased competition in both North American and international markets, which may lead to a decline in profitability and gross margins [21]. - The company faces significant competition in both North America and international markets, which could lead to declines in profitability and gross margins [21]. Financial Risks - Capri has incurred substantial indebtedness, which may restrict its ability to engage in additional transactions or incur further debt [24]. - The company has incurred substantial indebtedness, which may restrict its ability to engage in additional transactions or incur further debt [23]. - Increased costs of raw materials could raise production costs, negatively impacting operating results and financial condition [21]. - Fluctuations in tax obligations and changes in tax laws may adversely affect future effective tax rates and results [24]. Operational Risks - Capri's reliance on a limited number of distribution facilities poses a risk; operational difficulties at these facilities could materially impact business results [21]. - The company is dependent on a limited number of distribution facilities, and operational difficulties at these facilities could have a material adverse effect [21]. E-commerce and Cybersecurity - Capri's e-commerce strategy is critical; failure to execute effectively could harm reputation and operating results [21]. - The company faces risks associated with cybersecurity threats and data security breaches, which could negatively impact its reputation and business [24]. - Privacy breaches and cybersecurity risks could harm the company's reputation and business operations [24]. Legal and Regulatory Risks - The company is subject to various legal proceedings and disputes that could have an adverse impact on its financial condition and results of operations [24]. - The company is subject to various legal and regulatory risks that could impact financial condition and results of operations [24]. Employee Dependence - Key employee departures or failure to attract qualified personnel could adversely affect business operations and financial condition [21]. Proposed Sale Risks - Capri's proposed sale of Versace to the Prada Group is subject to risks that could affect business operations and market price of ordinary shares [25]. - The proposed sale of Versace could adversely affect the business and market price of ordinary shares if not completed [25].

Core Insights - Capri Holdings Limited (CPRI) reported disappointing fourth-quarter fiscal 2025 results, with both revenue and earnings declining year over year, although total revenues exceeded the Zacks Consensus Estimate while earnings fell short [1][2] Financial Performance - The company posted an adjusted quarterly loss of $4.90 per share, significantly wider than the Zacks Consensus Estimate of a loss of 16 cents, and down from adjusted earnings of 42 cents in the prior year [4] - Total revenues were $1,035 million, a decrease of 15.4% year over year on a reported basis and 14.1% on a constant-currency basis, surpassing the Zacks Consensus Estimate of $983 million [5] - Gross profit fell 17.7% year over year to $631 million, with gross margin contracting 170 basis points to 61% [5] Segment Performance - Versace revenues decreased 21.2% year over year to $208 million, with gross profit dropping to $136 million and gross margin contracting 60 basis points to 65.4% [6] - Jimmy Choo's revenues were $133 million, down 2.9% on a reported basis, with gross profit decreasing to $88 million and gross margin contracting 390 basis points to 66.2% [7] - Michael Kors revenues were $694 million, a decrease of 15.6% on a reported basis, with gross profit falling to $407 million and gross margin contracting 220 basis points to 58.6% [8] Strategic Developments - Capri Holdings is in the early stages of a strategic turnaround, with positive indicators emerging from new initiatives despite ongoing macroeconomic challenges [2] - The announced sale of the Versace brand to Prada Group for $1.375 billion aims to sharpen focus, strengthen the balance sheet, reduce debt, and potentially reinstate share repurchases [3][11] Financial Health - As of the end of the quarter, Capri Holdings had cash and cash equivalents of $166 million, long-term debt of $1.48 billion, and total shareholders' equity of $372 million [9] - Operating cash flow for fiscal 2025 was $281 million, while free cash flow totaled $153 million [9] Future Outlook - For the first quarter of fiscal 2026, total revenues are expected to be in the range of $765 to $780 million, indicating a decline from $1,067 million in the year-ago quarter [13] - For fiscal 2026, total revenues are projected to be between $3.3 billion and $3.4 billion, down from $4.4 billion in 2025, with an anticipated operating income of around $100 million [15] - Diluted earnings per share for fiscal 2026 are forecasted to be between $1.20 and $1.40, compared to a loss of $10 per share in 2024 [16]

Financial Data and Key Metrics Changes - Total company revenue for the fourth quarter decreased by 15% year-over-year to $1 billion, slightly better than expectations [29] - The company reported a net loss of $581 million, resulting in a diluted loss per share of $4.9, primarily due to a non-cash tax valuation allowance [29][38] - Gross margin declined to 61%, down 170 basis points from the prior year, primarily due to inventory actions taken during the quarter [33] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased by 16% compared to the prior year, with global retail sales down mid-teens and wholesale sales declining double digits [10][31] - Jimmy Choo revenue decreased by 3%, with global retail sales declining high single digits while wholesale increased high teens [19][32] - Michael Kors gross margin was 58.6%, down from 60.8% last year, while Jimmy Choo's gross margin was 66.2%, down from 70.1% [34] Market Data and Key Metrics Changes - Revenue in the Americas decreased by 13%, EMEA declined by 14%, and Asia saw a decrease of 23% [30][32] - For Jimmy Choo, revenue in the Americas decreased by 7%, while EMEA revenue increased by 9% and Asia revenue declined by 16% [32] Company Strategy and Development Direction - The company announced the pending sale of Versace to focus on growth opportunities within Michael Kors and Jimmy Choo, aiming to reduce debt and reinstate a share repurchase program [5][6] - Strategic initiatives include enhancing brand desirability, improving product offerings, and stabilizing the wholesale business [7][8][19] - The company plans to renovate approximately 50% of the Michael Kors store fleet over the next three years to drive sales recovery [16][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future despite a challenging macro environment, citing early signs of improvement in sales momentum and consumer engagement [6][17] - The company anticipates total revenue for fiscal 2026 to be between $3.3 billion and $3.4 billion, with gradual progression expected as strategic initiatives gain traction [45] Other Important Information - The company plans to use proceeds from the sale of Versace to reduce debt, which is expected to significantly lower interest expenses [41] - The company is proactively managing tariff risks and expects to mitigate their impact over time through sourcing optimization and potential price increases [44][70] Q&A Session Summary Question: Can you speak to the comfort in the troughing revenue expectations and margin degradation? - Management highlighted a significant improvement in Michael Kors retail performance, with a near flat comp in the current quarter compared to a 15% decline previously, driven by strong full-price sell-throughs and effective storytelling [58][60] Question: What is the wholesale outlook for Michael Kors this year? - Management indicated that discussions with wholesale partners have been positive, with increased commitments due to the successful new storytelling and product initiatives [74][76] Question: What strategies are in place to drive traffic and conversion? - Management emphasized the importance of marketing initiatives, data analytics, and influencer programs to engage consumers and drive traffic, noting that conversion rates have remained strong [82][84] Question: Can you elaborate on the strategies to improve the sales trajectory of Michael Kors? - Management acknowledged past missteps but emphasized a return to the brand's heritage and pricing strategy that aligns with consumer expectations, aiming for sustainable growth [90][92] Question: What is the timeline for achieving steady state pricing? - Management expects to reach the desired pricing levels by the fall season, having already made significant adjustments to align with historical price points [105]

Financial Data and Key Metrics Changes - Total company revenue for Q4 2025 was $1 billion, a decrease of 15% compared to the prior year, slightly better than expectations [27] - The company reported a net loss of $581 million, resulting in a diluted loss per share of $4.9, primarily due to a non-cash tax valuation allowance [27][35] - Gross margin decreased to 61%, down 170 basis points from the prior year, primarily due to inventory actions taken during the quarter [31][32] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased by 16% compared to the prior year, with global retail sales down mid-teens and wholesale sales declining double digits [29][30] - Jimmy Choo revenue decreased by 3% compared to the prior year, with global retail sales declining high single digits while wholesale increased high teens [30] - Michael Kors gross margin was 58.6%, down from 60.8% last year, while Jimmy Choo's gross margin was 66.2%, down from 70.1% [32] Market Data and Key Metrics Changes - Revenue in The Americas decreased by 13%, EMEA declined by 14%, and Asia saw a decrease of 23% [28][30] - In Jimmy Choo, revenue in The Americas decreased by 7%, while EMEA revenue increased by 9% and Asia revenue declined by 16% [30] Company Strategy and Development Direction - The company plans to focus resources on Michael Kors and Jimmy Choo following the pending sale of Versace, aiming to maximize value and reduce debt levels [4][5] - Strategic initiatives include enhancing brand desirability, improving product offerings, and stabilizing the wholesale business [6][10] - The company aims to grow Michael Kors to $4 billion in revenue and Jimmy Choo to $800 million, while restoring operating margins to the double-digit range [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future despite a challenging macro environment, focusing on strategic initiatives to improve sales trends [5][24] - Early signs of improvement in sales momentum and key indicators such as consumer database growth and store traffic were noted [16][17] - Management expects trends to improve throughout fiscal 2026, positioning the company for growth in fiscal 2027 and beyond [24][50] Other Important Information - The company plans to renovate approximately 50% of the Michael Kors store fleet over the next three years, with an estimated cost of $350 million [47] - The anticipated impact of tariffs is expected to increase the cost of goods sold by approximately $60 million in fiscal 2026 [42] - The company will reclassify Versace as a discontinued operation beginning in fiscal 2026, excluding it from future non-GAAP results [3] Q&A Session Summary Question: Discussion on revenue expectations and margin degradation - Management expressed optimism about revenue growth based on early Q1 trends, with significant improvements in Michael Kors retail performance and strong full-price sell-throughs [56][58] - Concerns about margin degradation were attributed to tariff impacts and inventory actions, with plans to mitigate these effects over time [65] Question: Wholesale outlook for Michael Kors - Management indicated that discussions with wholesale partners have been positive, with increased commitments from some partners and successful launches on platforms like Amazon [72][74] Question: Strategies to drive traffic and conversion - Management highlighted the importance of marketing initiatives, storytelling, and data analytics to engage consumers and drive traffic, noting improvements in conversion rates [80][81] Question: Strategies to improve sales trajectory for Michael Kors - Management acknowledged past missteps and emphasized a return to the brand's heritage and pricing strategies that resonate with consumers, aiming for sustainable growth [90][92] Question: Pricing strategy and its implications - Management expects to achieve a steady pricing state by the fall season, with adjustments made to align with historical price points while evaluating potential price increases to mitigate tariff risks [100]

Capri Holdings (CPRI) came out with a quarterly loss of $4.90 per share versus the Zacks Consensus Estimate of a loss of $0.16. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -2,962.50%. A quarter ago, it was expected that this luxury retailer would post earnings of $0.63 per share when it actually produced earnings of $0.45, delivering a surprise of -28.57%.Over the last four quarters, the ...

4Q Fiscal Year 2025 Earnings Presentation May 28, 2025 PENDING VERSACE SALE As previously announced, Capri Holdings entered into a definitive agreement to sell Versace to Prada Group for $1.375B in cash subject to certain adjustments. The transaction is expected to close in the second half of calendar 2025, subject to customary closing conditions including regulatory approvals. Capri plans to use the proceeds to: Beginning in fiscal 2026 Versace will be classified as a discontinued operation. • Invest in fu ...

Financial Performance - Total revenue for Q4 Fiscal 2025 was $1.0 billion, a decrease of 15.4% year-over-year, and a 14.1% decrease on a constant currency basis[10] - Gross profit was $631 million with a gross margin of 61.0%, down from $767 million and 62.7% in the prior year[10] - Net loss was $645 million, or $(5.44) per diluted share, compared to a net loss of $472 million, or $(4.03) per diluted share, in the prior year[10] - Total revenue for the three months ended March 29, 2025, was $1,035 million, a decrease of 15.4% compared to $1,223 million for the same period in 2024[30] - Gross profit for the three months ended March 29, 2025, was $631 million, down from $767 million in the prior year, representing a decline of 17.7%[30] - Net loss attributable to Capri for the three months ended March 29, 2025, was $645 million, compared to a net loss of $472 million for the same period in 2024, indicating a 36.6% increase in losses[30] - For the fiscal year ended March 29, 2025, total revenue was $4,442 million, down 14.1% from $5,170 million in the previous fiscal year[36] - The diluted net loss per ordinary share for the fiscal year ended March 29, 2025, was $10.00, compared to a diluted net income of $5.89 per share in the previous year[41] Revenue by Brand - Michael Kors revenue decreased by 15.6% to $694 million, while Jimmy Choo revenue decreased by 2.9% to $133 million[10] - Michael Kors revenue for the three months ended March 29, 2025, was $694 million, a decrease of 15.6% from $822 million in the same period last year[32] - Versace revenue for the three months ended March 29, 2025, was $208 million, down 21.2% from $264 million in the prior year[32] - Versace's revenue for the fiscal year ended March 29, 2025, was $821 million, a decrease of 20.3% from $1,030 million in the previous year[36] - Jimmy Choo revenue for the three months ended March 29, 2025, was $133 million, a slight decrease of 2.9% compared to $137 million in the same period in 2024[32] Future Outlook - Capri Holdings expects total revenue for Fiscal 2026 to be approximately $3.3 to $3.4 billion, with an operating income around $100 million[16] - The company anticipates diluted earnings per share for Fiscal 2026 to be approximately $1.20 to $1.40[16] - The company aims to grow Michael Kors to $4 billion in revenue and Jimmy Choo to $800 million over time, while restoring operating margin to the double-digit range[4] Cash Flow and Assets - Cash flow from operating activities for Fiscal 2025 was $281 million, resulting in free cash flow of $153 million after capital expenditures of $128 million[10] - Net inventory as of March 29, 2025, was $869 million, reflecting a 1% increase compared to the prior year[10] - Total current assets decreased to $1,521 million as of March 29, 2025, from $1,608 million as of March 30, 2024, reflecting a decline of 5.4%[28] - Total liabilities decreased to $4,841 million as of March 29, 2025, from $5,089 million as of March 30, 2024, a reduction of 4.9%[28] Operational Changes - The number of retail stores decreased to 1,158 as of March 29, 2025, down from 1,239 as of March 30, 2024, representing a decline of 6.5%[34] - The operating margin for Capri was (11.2)% for the three months ended March 29, 2025, compared to (44.4)% in the same period last year, showing improvement[32] - The operating margin for the three months ended March 29, 2025, was -11.2%, compared to 7.5% in the same period last year[38] Transformation Initiatives - The company is undergoing a multi-year ERP implementation to standardize finance IT applications across its organization[38] - The Capri transformation program aims to improve operational effectiveness and efficiency, with a focus on digital capabilities and shared platforms across brands[41] - The majority of operational and IT projects were paused during Fiscal 2024, with reassessment planned for Fiscal 2026[41] - The Capri transformation program aims to enhance operational effectiveness and efficiency through multi-year initiatives across various operational aspects, including supply chain and digital capabilities[46][48] Previous Fiscal Year Performance - For the fiscal year ended March 30, 2024, gross profit was $3,339 million, while operating expenses totaled $3,580 million, leading to a total operating loss of $241 million and an operating margin of (4.7)%[48] - The net loss attributable to Capri for the three months ended March 30, 2024, was $472 million, translating to a diluted net loss per ordinary share of $(4.03)[44] - For the fiscal year ended March 30, 2024, the net loss attributable to Capri was $229 million, with a diluted net loss per ordinary share of $(1.96)[48] - The company incurred foreign currency losses of $21 million in the three months ended March 30, 2024, and $37 million for the fiscal year ended March 30, 2024[44][48] - Asset impairment charges primarily related to the impairment of goodwill and intangible assets for the Jimmy Choo and Versace brands[44][48] Share Information - The weighted average diluted ordinary shares outstanding were 117,156,327 for the three months ended March 30, 2024, and 117,014,420 for the fiscal year ended March 30, 2024[44][48]

Wall Street analysts forecast that Capri Holdings (CPRI) will report quarterly loss of $0.16 per share in its upcoming release, pointing to a year-over-year decline of 138.1%. It is anticipated that revenues will amount to $982.81 million, exhibiting a decline of 19.6% compared to the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Prior ...

Group 1 - The "Trump Tariff Losers" index increased by 0.85%, reaching 84.49 points [1] - Zebra Technologies saw a rise of 5.16%, while Five Below increased by 3.12% [1] - Gap and Coach also experienced gains, with increases of 1.35% and 1.13% respectively [1] Group 2 - Dollar Tree rose by 0.9%, indicating a positive performance among some retailers [1] - Best Buy declined by 1.19%, and Harley-Davidson fell by 1.24%, showing mixed results in the sector [1]

Core Viewpoint - Capri Holdings Ltd is selling the Versace brand to Prada for $1.375 billion, which is expected to close in the second half of 2025 pending regulatory approval [1][2]. Group 1: Financial Impact - The proceeds from the sale will strengthen Capri's balance sheet, enhance investment in Michael Kors, and support debt reduction and share buybacks [2]. - Capri originally purchased Versace for $2.12 billion in 2018, indicating a loss on the sale [2][4]. - The sale is anticipated to boost overall company margins and free up funds for revitalization efforts for Michael Kors [4]. Group 2: Market Context - The sale of Versace was anticipated, with reports of Capri seeking a buyer circulating for months, and Prada emerging as a likely suitor [2]. - The analyst estimates that Prada is paying approximately 22x FY24 EBITDA and 1.6x trailing sales for Versace [3]. Group 3: Strategic Considerations - The sale is viewed as a logical move for Capri following the failed acquisition of Tapestry Inc., allowing the company to raise capital and enhance margins [3]. - Parting with Versace eliminates a previously expected growth catalyst, raising questions about the future profitability of Michael Kors due to ongoing challenges in wholesale and promotional markets [4].