Capri (US:CPRI) Goldman Sachs·2025-05-30 02:55Investment 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]