Core Viewpoint - Capri Holdings has experienced a decline of approximately 5.3% in share price over the past month, underperforming compared to the S&P 500, raising questions about its future performance leading up to the next earnings report [1]. Group 1: Earnings and Estimates - The consensus estimate for Capri Holdings has shifted by 48.57% over the past month, indicating a lack of movement in fresh estimates [2]. Group 2: VGM Scores - Capri Holdings currently holds a subpar Growth Score of D, while its Momentum Score is rated C. The stock has received a grade of B for value, placing it in the top 40% for this investment strategy. The overall aggregate VGM Score for the stock is C, which is relevant for investors not focused on a single strategy [3]. Group 3: Outlook - Capri Holdings has a Zacks Rank of 3 (Hold), suggesting an expectation of an in-line return from the stock in the upcoming months [4].

Core Viewpoint - Capri Holdings Ltd may face legal claims from individuals or entities that sold its stock during specified periods due to alleged violations of federal securities laws [2][3]. Group 1 - Individuals or entities that sold Capri common stock between May 28, 2023, and July 1, 2023, or from July 30, 2023, to August 9, 2023, may have valuable claims against the company [2]. - The claims could allow for the recovery of significant monetary damages from Capri, regardless of whether the individuals bought, sold, or continue to own other shares of Capri [2][3]. - Legal representation for shareholders is provided by Shapiro Haber & Urmy LLP, which specializes in class actions against corporate defendants [3].

Core Viewpoint - Capri Holdings' international revenue performance is crucial for assessing its financial resilience and growth prospects, especially given the interconnected global economy [2][9]. Group 1: International Revenue Performance - The company's total revenue for the quarter was $1.04 billion, reflecting a decrease of 15.4% [4]. - EMEA contributed 29.18% of total revenue, amounting to $302 million, which was a surprise increase of +3.31% compared to analyst expectations [5]. - Asia accounted for 16.62% of total revenue, translating to $172 million, also exceeding expectations with a surprise of +2.22% [6]. Group 2: Future Revenue Projections - Analysts project total revenue for the current fiscal quarter to be $772.33 million, indicating a decline of 27.6% from the previous year [7]. - For the entire year, total revenue is forecasted at $3.34 billion, a reduction of 24.7% from the previous year, with EMEA and Asia expected to contribute 35.3% ($1.18 billion) and 17.4% ($581.41 million) respectively [8]. Group 3: Market Context and Stock Performance - The reliance on international markets presents both opportunities and challenges for Capri Holdings, necessitating close monitoring of revenue trends for future projections [9]. - The stock has increased by 16.5% over the past month, outperforming the Zacks S&P 500 composite, which rose by 6.1% [13].

Group 1: Industry Developments - Kering Group has acquired Giambattista Valli, increasing its stake to full ownership, becoming the main investor and strategic decision-maker [11] - South Korean retail giant Shinsegae Group plans to acquire a controlling stake in C&C International, a color cosmetics ODM manufacturer, valued at 285 billion KRW (approximately 14.94 billion RMB) [6] - La Perla, a high-end lingerie brand, has been sold to an investment entity, which will retain the brand's existing factories and employees [5] Group 2: Company Performance - Gap Inc. reported a 2.2% increase in net sales to $3.463 billion for Q1, with net profit rising 22% to $193 million, driven by strong performance from Old Navy [2] - Capri Holdings reported a 15.4% decline in revenue to $1.035 billion for Q4 FY2025, with a net loss of $645 million, reflecting struggles across its main brands [3] Group 3: Mergers and Acquisitions - Elf Beauty has acquired Hailey Bieber's skincare brand Rhode for $1 billion, consisting of $600 million in cash and $200 million in newly issued common stock, with potential additional payments based on future growth [4] - Fountain Capital is seeking to raise up to $1.32 billion by selling approximately half of its stake in Amer Sports Inc., a manufacturer of sports equipment [4] Group 4: Brand Value Rankings - Chanel has surpassed Louis Vuitton to become the second most valuable luxury brand globally, according to Brand Finance's 2025 rankings, with Porsche retaining the top position [7] Group 5: Retail Expansion - Balenciaga has opened its largest flagship store globally in Beijing, covering 1,204 square meters, emphasizing its commitment to the Chinese market [8] Group 6: Data Security Issues - Adidas has reported a data breach involving customer data theft from a service provider, although payment information and passwords were not compromised [12]

Investment Rating - The report indicates that Capri Holdings (CPRI) is currently Not Rated [8]. Core Insights - Capri Holdings reported F4Q adjusted EPS of -$4.90, significantly below consensus estimates of -$0.16 to -$0.13, primarily due to a tax valuation allowance charge [1] - Despite the overall challenges, CPRI delivered better-than-expected revenue trends in the quarter, with consolidated sales declining by -15.4% year-over-year to $1.035 billion, surpassing consensus expectations of $974.7 million to $1.004 billion [1][9] - The company updated its FY26 guidance, now expecting total revenues of $3.3 billion to $3.4 billion, down from approximately $4.1 billion previously, reflecting the exclusion of Versace's contribution [2][9] - Management remains optimistic about returning to growth in FY27 and beyond, although profitability was disappointing due to gross margin contraction [3] Revenue Performance - Michael Kors sales were reported at $694 million, better than consensus expectations of $687.8 million, with a decline of -15.6% year-over-year [1][9] - Jimmy Choo sales were approximately in line with expectations at $133 million, declining -2.9% year-over-year [1][9] - Versace sales were reported at $208 million, consistent with consensus, declining -21.2% year-over-year [1][9] Margin Analysis - The adjusted gross margin for F4Q25 was 61.0%, below consensus estimates of 62.7% and 61.8% [1][9] - Adjusted SG&A as a percentage of sales was 64.2%, better than Goldman Sachs estimates of 65.3% but higher than consensus at 62.6% [1][9] - Adjusted EBIT margins were reported at -3.2%, below consensus estimates of -2.6% to -2.4% [1][9] FY26 Guidance - The company expects operating income of approximately $100 million for FY26, down from $150 million previously, with consensus estimates at $145.3 million to $141.9 million [2][9] - Michael Kors is now guided for sales of approximately $2.75 billion to $2.85 billion, while Jimmy Choo sales are expected at $540 million to $550 million [9] - For Q1, CPRI guided revenue of $765 million to $780 million, with adjusted EPS expected to be between $0.10 and $0.15 [9]

Core Viewpoint - Telsey Advisory Group analyst Dana Telsey maintains a Market Perform rating on Capri Holdings Limited (CPRI) and raises the price forecast from $17 to $20, despite the company reporting a larger-than-expected adjusted loss in Q4 [1][2]. Financial Performance - Capri Holdings reported a fourth-quarter adjusted loss of $4.90 per share, missing the expected loss of 14 cents, while quarterly sales reached $1.035 billion, a decline of 15.4% year over year, but exceeding the analyst consensus estimate of $986.57 million [1][2]. - On a constant currency basis, total revenue decreased by 14.1% [1]. Strategic Developments - The company has made significant announcements since Q3 FY25, including long-term brand-specific targets, the departure of CFO/COO Tom Edwards, and the $1.375 billion sale of Versace to Prada [2][3]. - These developments come after a failed acquisition attempt by Tapestry, Inc. in late 2024, with management aiming to stabilize operations through FY26 and anticipate a return to growth in FY27 [3]. Brand Performance - Michael Kors, Capri's largest brand, has experienced ten consecutive quarters of revenue declines, indicating substantial efforts are needed for recovery [3][4]. - The sale of Versace is expected to enhance margins and improve the balance sheet, allowing for potential share buybacks, although challenges remain for the Michael Kors and Jimmy Choo brands [4]. Production and Cost Implications - For FY26, most of Michael Kors' production will be sourced from Vietnam, Cambodia, and Indonesia, with only about 5% of total U.S. production tied to China [5]. - Under current tariff assumptions, the company anticipates a cost impact of approximately $60 million, potentially reducing gross margin by around 100 basis points [5]. Future Projections - Telsey projects FY26 revenue to decline by 24.3% to $3.36 billion, a sharper drop than the previously estimated 7.7% fall, while raising the FY26 EPS estimate to $1.33 from $1.02 [6]. - For FY27, Capri Holdings expects a return to revenue growth, supported by operating margin expansion due to ongoing cost-cutting initiatives [7].

Group 1 - Capri Holdings Limited reported mixed results for Q4, with adjusted EPS of a $4.90 loss, missing the Street view of a $0.14 loss, while quarterly sales were $1.035 billion, down 15.4% year over year, exceeding the analyst consensus estimate of $986.57 million [1] - CEO John D. Idol emphasized the company's focus on strategic initiatives aimed at returning to growth, expressing confidence in growing Michael Kors to $4 billion in revenue and Jimmy Choo to $800 million, while restoring operating margins to double-digit levels [2] - For fiscal 2026, Capri Holdings expects adjusted EPS to range between $1.20 and $1.40, above the $1.06 analyst estimate, but has lowered its sales guidance to $3.30 billion–$3.40 billion from a prior outlook of $4.10 billion, which is below the $4.11 billion consensus [3] Group 2 - For Q1, the company anticipates total revenue of approximately $765 million to $780 million, compared to the $959.91 million estimate, and projects EPS of approximately $0.10 to $0.15 against the $0.10 estimate [4] - Following the earnings announcement, Capri Holdings shares increased by 2.1% to trade at $18.42 [4] - Analysts have adjusted their price targets for Capri Holdings, with Telsey Advisory Group raising it from $17 to $20, JP Morgan lowering it from $19 to $18, and UBS raising it from $14 to $18 [9]

Group 1 - The core statement from Capri Holdings' CEO John Idol indicates that the company is in the early stages of a turnaround [1] Group 2 - The article reflects a focus on value investing rather than growth investing, highlighting a long-term perspective in investment analysis [1] - The author has been contributing to investment discussions since 2011, indicating a wealth of experience in analyzing market trends [1]

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]