Capri Holdings (CPRI) Up 1.6% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Capri Holdings reported disappointing Q3 fiscal 2025 results, with both revenue and earnings declining year over year, although total revenues exceeded consensus estimates while earnings fell short [2][3]. Financial Performance - Adjusted quarterly earnings were 45 cents per share, down from $1.20 in the same period last year, and below the Zacks Consensus Estimate of 63 cents per share [3]. - Total revenues reached $1,261 million, surpassing the Zacks Consensus Estimate of $1,248 million, but decreased by 11.6% year over year on a reported basis and 11.4% on a constant-currency basis [4]. - Gross profit fell 12.5% year over year to $812 million, with gross margin contracting by 60 basis points to 64.4% due to lower full-price sell-throughs [4]. Segment Performance - Versace's revenues declined 15% year over year to $193 million, with retail sales dropping in the mid-teens and wholesale revenues declining in double digits [6]. - Jimmy Choo's revenues were $159 million, marking a 4.2% decrease, with retail sales stable and wholesale revenues down in the mid-teens [7]. - Michael Kors reported revenues of $909 million, a decrease of 12.1%, with retail sales declining in the low teens and wholesale revenues falling in the high-single digits [8]. Financial Health - The company ended the quarter with cash and cash equivalents of $356 million, long-term debt of $1.45 billion, and total shareholders' equity of $1.07 billion [9]. - Operating cash flow for the fiscal third quarter was $309 million, while free cash flow totaled $278 million [9]. Future Outlook - For fiscal 2025, Capri Holdings expects total revenues of $4.4 billion, with adjusted operating income projected at $100 million [10]. - For fiscal 2026, total revenues are anticipated to be $4.1 billion, with adjusted operating income expected to reach $150 million [12]. Estimate Trends - Recent estimates have trended downward, with the consensus estimate shifting by -178.05% [14]. - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [16].