Core Insights - Capri Holdings Limited reported second quarter results for Fiscal 2026, with revenue, gross margin, and operating income exceeding expectations, indicating positive trends in the luxury fashion market [1][2] - The company announced a $1 billion share repurchase program, expected to begin in Fiscal 2027, aimed at strengthening its balance sheet and returning capital to shareholders [2][10] - The sale of Versace to Prada for $1.375 billion is anticipated to close in the third quarter of Fiscal 2026, allowing Capri to focus on growth for its remaining brands, Michael Kors and Jimmy Choo [2][4] Financial Performance - Total revenue for the second quarter was $856 million, a decrease of 2.5% year-over-year, and a 4.2% decline on a constant currency basis [12][30] - Gross profit was $522 million, with a gross margin of 61.0%, down from 62.3% in the prior year, impacted by tariffs [12][30] - The company reported a net loss of $34 million, or $(0.28) per diluted share, compared to a net income of $42 million, or $0.37 per diluted share, in the previous year [12][30] Segment Performance - Michael Kors generated revenue of $725 million, a decrease of 1.8% on a reported basis and 3.3% in constant currency [12][30] - Jimmy Choo's revenue was $131 million, down 6.4% on a reported basis and 9.3% in constant currency [12][30] - The operating margin for Michael Kors was 10.1%, while Jimmy Choo reported an operating loss margin of (6.9)% [12][30] Outlook and Strategic Initiatives - The company expects retail trends to improve in the latter half of Fiscal 2026, positioning it for growth in Fiscal 2027 [2][11] - Capri Holdings aims to utilize proceeds from the Versace sale to reduce debt significantly, enhancing financial flexibility for future investments [2][4] - Long-term growth potential for Michael Kors and Jimmy Choo remains optimistic, with strategic initiatives in place to energize these brands [2][11]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" to maximize returns in a shorter time frame [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lose momentum if future growth does not justify high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Capri Holdings (CPRI) Analysis - Capri Holdings has shown a price increase of 11% over the past four weeks, indicating growing investor interest [4] - The stock has gained 20.7% over the past 12 weeks, with a beta of 1.82, suggesting it moves significantly more than the market [5] - CPRI has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] - An upward trend in earnings estimate revisions has contributed to CPRI's Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - CPRI is trading at a Price-to-Sales ratio of 0.64, suggesting it is undervalued relative to its sales [7] Group 3: Additional Investment Opportunities - Besides CPRI, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to various investing styles, aiding in stock selection [9]

Upgrades - BofA upgraded Eversource (ES) to Buy from Neutral with a price target of $85, up from $73, citing an "improving regulatory tone" and a projected 6% EPS growth through 2029 [2] - Leerink upgraded Exelixis (EXEL) to Outperform from Market Perform with a price target of $48, up from $38, following the Phase 3 STELLAR-303 trial results, which established important levers for long-term investment despite a 12% stock decline [3] - Citi upgraded Nextracker (NXT) to Buy from Neutral with a price target of $114, up from $66, highlighting its dominant position in tracker sales and potential revenue contributions from acquired businesses by FY30 [4] - Citi upgraded Sunrun (RUN) to Buy from Neutral with a price target of $26, up from $11, noting benefits from rising electricity rates and increased leverage over suppliers due to market shifts [5] - Raymond James upgraded Capri Holdings (CPRI) to Outperform from Market Perform with a price target of $25, indicating a favorable turnaround position supported by improving demand and conservative guidance [6] Downgrades - JPMorgan downgraded Goldman Sachs (GS) to Neutral from Overweight with a price target of $750, up from $625, citing high current valuations compared to European investment banks [7] - BNP Paribas Exane downgraded Verizon (VZ) to Neutral from Outperform with a price target of $44, raising concerns about strategic direction following a recent CEO change [7] - BNP Paribas Exane downgraded NuScale Power (SMR) to Underperform from Neutral with a price target of $25, down from $41, due to concerns over cumulative shipments and financial commitments [7] - Citi downgraded NuScale to Sell from Neutral with a price target of $37.50, down from $46, highlighting potential sales by Fluor and stretched valuations [7] - TD Cowen downgraded Tempus AI (TEM) to Hold from Buy with a price target of $88, up from $72, viewing the stock as fairly valued after a significant rally [7] - Wells Fargo downgraded Cleveland-Cliffs (CLF) to Underweight from Equal Weight with an unchanged price target of $11, describing the recent stock rally as "excess exuberance" [7]

Leadership Changes - PVH Corp. has appointed Patricia Gabriel as chief supply chain officer and global head of operations, succeeding David Savman, who will focus on his role as Calvin Klein's global brand president [1] - Toms has named Jessica Alsing as chief executive officer, marking the first time a woman leads the company [2] - Puma has appointed Thomas John as vice president of people and organization, effective October 16, succeeding Dietmar Knoess [3] - Vestiaire Collective has promoted Bernard Osta from chief financial officer to chief executive officer, replacing Maximilian Bittner [4] Strategic Focus - Patricia Gabriel will oversee global operations at PVH, bringing experience from her previous role at Capri Holdings [1] - Jessica Alsing previously served as chief digital officer, focusing on global e-commerce and digital engagement [2] - Bernard Osta plans to accelerate AI efforts, enhance brand and global presence, and improve authentication leadership at Vestiaire Collective [4]

Core Insights - The article is part of a series comparing three companies in the luxury sector, with a focus on value investing and long-term strategies [1] Group 1: Investment Philosophy - The author identifies as a value investor, emphasizing the importance of investing in great companies at a price below their intrinsic value to ensure a margin of safety [1] - The primary consideration before investing is the potential loss and the likelihood of its occurrence, rather than short-term market volatility [1] - The author does not view volatility as a risk but rather as a challenge for those looking to exit positions quickly or lacking understanding of their investments [1] Group 2: Influences and Approach - The author admires several prominent investors, including Warren Buffett, Charlie Munger, Peter Lynch, and Mohnish Pabrai, who have influenced their investment philosophy [1]

Group 1 - The European Commission has approved Prada's acquisition of fashion group Versace, stating that the transaction does not pose any competition issues [1] - Earlier this year, Prada reached a deal valued at $1.38 billion to acquire the smaller competitor Versace from Capri Holdings [1]

Core Insights - Capri Holdings Limited (NYSE: CPRI) is progressing without Versace, indicating a strategic shift in its operations [1] - The company is facing antitrust issues with Tapestry, Inc. (TPR), which may impact its market position and operational strategies [1] Group 1 - Capri Holdings Limited is focusing on its core business operations while distancing itself from Versace [1] - The company has taken on leverage in previous years, which could affect its financial stability and growth potential [1] - The investment group "Value In Corporate Events" provides insights into major corporate events, including earnings reports and M&A activities, to identify investment opportunities [1]

Group 1: LVMH Performance - LVMH reported H1 2025 revenue of €39.81 billion (approximately $46.6 billion), a 4% decrease from €41.68 billion in the same period last year [3] - Operating profit fell to €9.01 billion, down 15% from €10.65 billion year-on-year [3] - Net profit decreased by 22% to €5.70 billion from €7.27 billion in the previous year [3] Group 2: Richemont Performance - Richemont's total sales for Q1 2025 reached €5.41 billion (approximately $6.33 billion), up from €5.27 billion year-on-year [4] - Jewelry sales increased to €3.91 billion from €3.66 billion, while watch sales decreased to €0.82 billion from €0.91 billion [4] Group 3: Hermès Performance - Hermès reported H1 2025 revenue of €8.03 billion (approximately $9.4 billion), an increase from €7.50 billion in the same period last year [5] - Operating profit rose to €3.33 billion from €3.15 billion year-on-year [5] - Net profit for the group was €2.25 billion, down from €2.37 billion in the previous year [5] Group 4: Kering Performance - Kering's H1 2025 revenue was €7.59 billion (approximately $8.8 billion), down from €9.02 billion year-on-year [6] - Operating profit decreased to €1.00 billion from €1.57 billion [6] - Net profit attributable to the group fell to €0.47 billion from €0.88 billion [6][7] Group 5: EssilorLuxottica Performance - EssilorLuxottica reported adjusted revenue of €14.02 billion for H1 2025, up from €13.29 billion year-on-year [8] - Adjusted operating profit increased to €2.53 billion from €2.43 billion [8] - Adjusted net profit rose to €1.80 billion from €1.75 billion [8] Group 6: Other Companies Performance - Lao Feng Xiang reported H1 2025 revenue of ¥33.36 billion (approximately $4.68 billion), a 16.52% decrease year-on-year [9] - PVH Corp. reported Q2 2025 revenue of $2.17 billion, up from $2.07 billion year-on-year [10] - Swatch Group's H1 2025 net sales were CHF 3.06 billion (approximately $3.83 billion), down 11.2% from the previous year [11] - Tapestry reported Q4 2025 net sales of $1.72 billion, up from $1.59 billion year-on-year [12] - Ralph Lauren's Q1 2025 net sales were $1.72 billion, up from $1.51 billion [13] - Prada Group reported H1 2025 revenue of €2.74 billion (approximately $3.21 billion), an 8% increase year-on-year [15] - Signet Jewelers reported Q2 2025 sales of $1.54 billion, up from $1.49 billion year-on-year [16] - Puig reported H1 2025 revenue of €2.30 billion (approximately $2.69 billion), a 5.9% increase year-on-year [17] - Hugo Boss reported H1 2025 sales of €2.00 billion (approximately $2.34 billion), down from €2.03 billion [18] - Pandora reported Q2 2025 revenue of DKK 7.07 billion (approximately $1.11 billion), up from DKK 6.77 billion [19] - Capri Holdings reported Q1 2025 revenue of $797 million, down from $848 million [20] - Burberry reported Q1 2025 retail revenue of £433 million (approximately $586 million), down 6% year-on-year [21] - Ermenegildo Zegna Group reported H1 2025 revenue of €0.93 billion (approximately $1.09 billion), down from €0.96 billion [23] - Zhou Dasheng reported H1 2025 revenue of ¥4.60 billion (approximately $645 million), a 43.92% decrease year-on-year [24] - Salvatore Ferragamo reported H1 2025 revenue of €0.47 billion (approximately $0.55 billion), down 9.4% year-on-year [25] - Fossil Group reported Q2 2025 net sales of $220 million, down from $260 million [26]

Core Insights - Capri Sun has evolved from a beverage brand to a cultural icon, with fans creatively repurposing its packaging into fashion items since the early 2000s [1] - The brand has partnered with renowned American fashion designer Christian Siriano to celebrate this trend and further enhance its status in the fashion industry [1] Brand Evolution - The transformation of Capri Sun's iconic silver pouch into a fashion statement has been driven by user-generated content on platforms like YouTube and TikTok [1] - This trend has engaged multiple generations of fans, turning them into at-home designers and reinforcing the pouch's status as a style statement [1] Collaboration - The collaboration with Christian Siriano marks a significant step for Capri Sun in merging beverage branding with high fashion [1] - This partnership aims to celebrate and elevate the creativity of Capri Sun enthusiasts while tapping into the fashion market [1]

Core Insights - Capri Holdings' international operations are crucial for understanding its financial resilience and growth potential [1][2] - The company's total revenue for the quarter ending June 2025 was $797 million, a decrease of 25.3% year-over-year [4] International Revenue Analysis - EMEA generated $228 million, accounting for 28.6% of total revenue, exceeding Wall Street's expectation of $213.7 million by +6.69% [5] - Asia contributed $110 million, representing 13.8% of total revenue, falling short of the expected $112.31 million by -2.06% [6] - For the upcoming fiscal quarter, total revenue is projected at $828 million, a decline of 23.3% year-over-year, with EMEA and Asia expected to contribute 29.8% ($246.49 million) and 9.6% ($79.12 million) respectively [7] - For the full year, total revenue is anticipated to be $3.42 billion, reflecting a 23% decline from the previous year, with EMEA and Asia expected to account for 28% ($957.53 million) and 11.5% ($394.21 million) respectively [8] Market Context - The dependency on global markets presents both opportunities and risks for Capri Holdings, making the monitoring of international revenue trends essential for predicting future performance [9][10] - The stock has appreciated by 2.3% over the past four weeks, in line with the Zacks S&P 500 composite, while over three months, it has increased by 6.1%, compared to the S&P 500's 13.2% rise [13]