Core Insights - Capri Holdings Limited (CPRI) reported a decline in top-line revenue year over year but exceeded the Zacks Consensus Estimate, while the bottom line decreased and missed consensus estimates [1][10] - The company is focused on growth through its core brands and aims to enhance profitability and reduce debt following the expected closure of the Versace sale-off [2][3] Financial Performance - CPRI posted an adjusted quarterly loss of $0.03 per share, missing the Zacks Consensus Estimate of $0.14, and down from adjusted earnings of $0.64 per share in the prior year [4][10] - Total revenues were $856 million, a decrease of 2.5% year over year, but above the Zacks Consensus Estimate of $830 million; on a constant-currency basis, revenues fell by 4.2% [5][10] - Gross profit decreased by 4.6% year over year to $522 million, with a gross margin decline of 130 basis points to 61% [5][6] Segment Performance - Michael Kors revenues declined by 1.8% year over year to $725 million, surpassing the Zacks Consensus Estimate of $697.2 million; gross profit fell to $430 million, with a gross margin contraction of 180 basis points to 59.3% [7] - Jimmy Choo's revenues were $131 million, down 6.4% year over year, missing the Zacks Consensus Estimate of $132.8 million; gross profit slightly decreased to $92 million, but gross margin expanded to 70.2% [8] Strategic Initiatives - The company plans to utilize proceeds from the Versace sale-off to improve financial flexibility and support a newly authorized $1 billion share repurchase program expected to begin in fiscal 2027 [3][12] - Capri Holdings anticipates improving retail trends in the second half of fiscal 2026, positioning itself for a return to growth in fiscal 2027 [3] Future Outlook - For the third quarter of fiscal 2026, Capri Holdings expects total revenues between $975 million and $1 billion, with an operating margin of 7-8% and earnings per share between $0.70 and $0.80 [15] - For fiscal 2026, total revenues are projected to be between $3.375 billion and $3.45 billion, with an expected operating income of $100 million and earnings per share of $1.20 to $1.40 [17][18]

Core Insights - Capri Holdings reported an unexpected quarterly loss and warned of potential margin impacts due to tariffs amid rising economic uncertainty affecting consumer sentiment and retail operations [1][2] - The company anticipates an unmitigated tariff impact of approximately $85 million in fiscal 2026 [1] Financial Performance - Capri's quarterly gross margin decreased to 61% from 62.3%, primarily due to a 130-basis-point negative impact from tariffs [3] - The company posted a quarterly adjusted loss of 3 cents per share, contrasting with Wall Street estimates of a profit of 13 cents per share [3] - Quarterly revenue reached $856 million, surpassing estimates of $825.7 million [5] Brand Performance - Revenue for the Michael Kors brand declined by 1.8% on a reported basis, an improvement from a 5.9% decline in the previous quarter [4] - Capri's turnaround efforts included the sale of its struggling Versace label to Prada earlier this year [4] Market Outlook - CEO John Idol projected a gross margin decline of 200 to 250 basis points for Q3, attributing this to higher inventory costs due to full tariffs [2] - Analyst Rachel Wolff noted that while Capri's earnings indicate some recovery in the luxury industry, demand remains uncertain due to economic turbulence affecting consumer sentiment [4]

Core Viewpoint - Capri Holdings (CPRI) has experienced a bearish trend recently, losing 8.1% over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, with selling pressure likely subsiding, which could lead to a bullish trend for the stock [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, signaling that bears may be losing control and bulls are starting to gain traction [4][5]. - This pattern can occur across various timeframes and is utilized by both short-term and long-term investors [5]. Fundamental Analysis - There is a strong consensus among Wall Street analysts to raise earnings estimates for Capri Holdings, which supports the bullish case for the stock [2][7]. - Over the last 30 days, the consensus EPS estimate for the current year has increased by 1.5%, indicating that analysts expect better earnings than previously predicted [8]. - Capri Holdings currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10]. Conclusion - The combination of the hammer chart pattern and positive earnings estimate revisions suggests that Capri Holdings may be on the verge of a trend reversal, making it a stock to watch for potential investment opportunities [1][7][10].

Financial Data and Key Metrics Changes - Total company revenue decreased 2.5% year-over-year to $856 million, with a 4.2% decline in constant currency [20][22] - Gross margin declined 130 basis points to 61%, primarily due to higher tariff rates impacting margins by approximately 120 basis points [22][23] - Operating margin decreased to 2.3% from 4.2% year-over-year [23] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased 2% year-over-year, with retail sales showing signs of momentum and positive comps in the full-price channel [6][21] - Jimmy Choo revenue decreased 6% year-over-year, with retail sales improving sequentially but wholesale revenue declining mid-teens due to shipment timing [14][22] Market Data and Key Metrics Changes - Revenue in the Americas decreased 7%, while EMEA increased 1% and Asia increased 12% [21] - Michael Kors saw a 25% increase in revenue in Asia, driven by higher wholesale shipments [21] Company Strategy and Development Direction - The company is focused on the growth of Michael Kors and Jimmy Choo following the expected closure of the Versace sale, with plans to use proceeds to reduce debt and enhance financial flexibility [4][26] - A new $1 billion share repurchase program has been authorized, expected to begin in fiscal 2027 [4][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilization and recovery in the business, with expectations for improved retail trends in the second half of fiscal 2026 [5][29] - The company anticipates returning to revenue and earnings growth in fiscal 2027, with gross margin expansion expected as tariff impacts are mitigated [29] Other Important Information - The company plans to invest approximately $350 million over the next three years for store renovations, aiming to enhance the luxury retail experience [12][26] - Inventory at quarter-end totaled $766 million, a 2.8% decline year-over-year [24] Q&A Session Summary Question: Can you speak to global reception for Michael Kors full-price retail repositioning? - Management noted stabilization in Michael Kors business, with positive consumer response to strategic initiatives and full-price comps turning positive [31][32] Question: What is the profile of the consumer engaging in North America? - Management indicated that Gen Z consumers are more price-sensitive, and strategic pricing architecture is helping attract them [40][41] Question: What are the expectations for revenue by geography in the back half? - Management stated that Europe is the best-performing region, with continued strong performance anticipated, while North America is expected to improve gradually [55][56]

Core Insights - Capri Holdings reported a quarterly loss of $0.03 per share, significantly missing the Zacks Consensus Estimate of $0.14, and down from earnings of $0.65 per share a year ago, representing an earnings surprise of -121.43% [1] - The company posted revenues of $856 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.14%, but down from $1.08 billion in the same quarter last year [2] - Capri Holdings has surpassed consensus revenue estimates four times over the last four quarters, although it has only beaten EPS estimates once in the same timeframe [2] Financial Performance - The stock has underperformed the market, losing about 1.6% since the beginning of the year, while the S&P 500 has gained 16.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $1.01 billion, and for the current fiscal year, it is $1.36 on revenues of $3.43 billion [7] Industry Outlook - The Retail - Apparel and Shoes industry, to which Capri Holdings belongs, is currently ranked in the top 15% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Capri Holdings' stock performance [5][6]

Financial Performance - Capri Holdings' revenue decreased by 2.5% (or 4.2% on a constant currency basis) in 2Q Fiscal Year 2026[10] - Michael Kors' revenue decreased by 1.8% (or 3.3% on a constant currency basis) in 2Q26[17] - Jimmy Choo's revenue decreased by 6.4% (or 9.3% on a constant currency basis) in 2Q26[24] - The company anticipates revenue of approximately $975 million to $1 billion for 3Q26 and $3.375 billion to $3.45 billion for FY26[26] - The adjusted operating margin is expected to be around 7.0% to 8.0% for 3Q26[26] Strategic Initiatives & Brand Performance - Michael Kors' operating margin was 10.1% in 2Q26[17] - Jimmy Choo's operating margin was (6.9)% in 2Q26[24] - Both Michael Kors and Jimmy Choo experienced a 9% year-over-year increase in their consumer databases[10, 17, 24] Versace Sale & Future Plans - Capri Holdings entered into an agreement to sell Versace to Prada for $1.375 billion in cash[4] - The sale of Versace is expected to close in the company's fiscal third quarter[4] - Capri plans to use the proceeds from the Versace sale to reduce debt, invest in future growth, and reinstate a share repurchase program[6] Fiscal Year 2026 Outlook - The company projects diluted earnings per share (from continuing operations) of approximately $0.70 to $0.80 for 3Q26 and $1.20 to $1.40 for FY26[26]

Financial Performance - Total revenue for the second quarter of Fiscal 2026 was $856 million, a decrease of 2.5% on a reported basis and 4.2% in constant currency[10]. - The company reported a net loss of $34 million, or $(0.28) per diluted share, compared to net income of $42 million, or $0.37 per diluted share, in the prior year[10]. - Total revenue for the three months ended September 27, 2025, was $856 million, a decrease of 2.5% compared to $878 million for the same period in 2024[30]. - Net loss attributable to Capri for the three months ended September 27, 2025, was $28 million, compared to a net income of $24 million for the same period in 2024[30]. - Total revenue for Michael Kors decreased by 1.8% to $725 million in Q3 2025 compared to $738 million in Q3 2024[36]. - Total revenue for Jimmy Choo declined by 6.4% to $131 million in Q3 2025 from $140 million in Q3 2024[36]. - The company's total revenue for the first half of 2025 was $1.65 billion, representing a 4.2% decline from $1.73 billion in the first half of 2024[36]. - For the first half of 2025, Michael Kors revenue was $1.36 billion, a decrease of 3.8% from $1.41 billion in the same period of 2024[36]. - Jimmy Choo's revenue for the first half of 2025 was $293 million, down 6.4% from $313 million in the first half of 2024[36]. Gross Profit and Margins - Gross profit was $522 million with a gross margin of 61.0%, down from $547 million and 62.3% in the prior year, impacted by tariffs which negatively affected the gross margin by approximately 130 basis points[10]. - Operating margin for Michael Kors was 10.1% for the three months ended September 27, 2025, compared to 11.8% in the same period last year[32]. - The adjusted operating margin for Q3 2025 was 2.3%, compared to 4.2% in Q3 2024[38]. Cash Flow and Assets - Cash flow used in operating activities for the second quarter was $33 million, resulting in free cash flow of $(46) million[10]. - Total current assets increased to $1,705 million as of September 27, 2025, compared to $1,667 million as of September 28, 2024[28]. Liabilities and Debt Management - Total liabilities increased to $5,687 million as of September 27, 2025, compared to $5,306 million as of September 28, 2024[28]. - The company plans to use proceeds from the Versace sale, expected to close in the fiscal third quarter, to repay the majority of its debt, enhancing financial flexibility[4]. Shareholder Returns - Capri Holdings announced a new $1 billion share repurchase program, expected to begin in fiscal 2027, aimed at strengthening the balance sheet and returning capital to shareholders[4][13]. Store Count and Operational Changes - The number of retail stores decreased to 907 as of September 27, 2025, down from 981 stores as of September 28, 2024[34]. - The Capri transformation program aims to enhance operational effectiveness and digital capabilities across brands[38]. Adjustments and Costs - The company incurred $32 million in total adjustments for Q3 2025, including impairment charges and restructuring costs[38].

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]