$CPRI Q3 2022 Earnings Report
$CPRI Long
Capri is the owner of brands such as Versace and Michael Kors. Over the past two years, they’ve always beat the estimates. I’m expecting them to have a big revenue this quarter especially due to the fact that the pandemic phase is over and consumers are returning back to their active social lives and the demand for these types of products has increased. The summer season is coming up as well which will also increase demand. I also think that over the past couple of months they’ve had a whole new range of new customers considering the amount of wealth that people made from NFTs and cryptos. Additionally, many people in this sector are struggling with high inflation, however, considering Capri’s targeted audience is wealthy people, they haven’t been affected by it. In their last report, there also weren’t any mentions of them struggling due to the slowdown of the economy and their only problem was the lockdown in China which has since then stopped. According to 23 analysts, none of them had any sell rating with most of them marking it as a strong buy. Around a month ago at an Investor Day in New York, John Idol, chairman, and CEO of Capri Holdings talked about his plans for the future of the company as he marked Capri’s successful transformation into a global luxury fashion group. Over the long term, Michael Kors’ revenues are projected to increase by just over $1 billion to $5 billion as Versace is seen adding another $900 million to $2 billion and Jimmy Choo is expected to add $387 million to hit $1 billion. Capri aims to reach 1,400 stores in total across brands in the long term. “For Versace and Jimmy Choo, we continue to expect 300 luxury stores over time,” Edwards said. “And for Michael Kors, we now anticipate 800 stores. This reflects a significant growth opportunity in Asia, better performance in the Americas as we saw over the last years, and we’ll continue to selectively optimize our fleet.” I believe not only this will all be very good news to investors, but it also shows how well they are doing financially in order to make these plans. Jimmy Choo CEO Hannah Colman also said the brand will be capitalizing on its casual footwear opportunity. “We will double this business in the short term by reinforcing our product offer and leveraging brand codes in this segment. We have a significant opportunity to grow sneakers to be at least 25% of footwear sales. Beyond sneakers, we have the opportunity to build on our casual boot assortment as we reinforce our authority in off-duty boots, such as our iconic combat silhouette, one of which you see up here. Additionally, we’re expanding our casual footwear offer with new functions such as pool slides, rain boots, and snow boots.”
Disadvantages: Many people are going through an economic recession right now which might cause them to be more cautious about their spending habits, especially luxury materials. The NFT market has also crashed which could prevent many new customer purchases that would’ve been possible last quarter. Why this stock? This stock hasn’t gone down or missed any estimates since 2018. While this doesn’t 100% mean it will be the same this quarter, its probability will be much higher than the other stocks that have a report today. I had also done research on it the last time we invested so I'm much more familiar with this company. Stock price history: Last week +5% Last month +18% Last 6 months -18% Last year -22% Initial reaction: Long Researched reaction: Long Debt VS. Revenue: Capri Holdings’ long-term debt for 2021 was $1.219B, a 39.41% decline from 2020. Capri Holdings’ long-term debt for 2020 was $2.012B, a 3.93% increase from 2019. Revenue of around 5.5 billion per year Top Institutional Holders: Holder Shares Date Reported % Out Value FMR, LLC 22,151,824 Mar 30, 2022 15.51% 1,125,866,471 Vanguard Group, Inc. (The) 14,073,829 Mar 30, 2022 9.85% 715,302,369 Blackrock Inc. 12,779,026 Mar 30, 2022 8.95% 649,494,006 Senvest Management LLC 5,909,283 Mar 30, 2022 4.14% 300,339,312 State Street Corporation 4,421,881 Mar 30, 2022 3.10% 224,742,105 Fred Alger Management, LLC 4,218,844 Mar 30, 2022 2.95% 214,422,749 Price (T.Rowe) Associates Inc 3,468,446 Mar 30, 2022 2.43% 176,283,770 Pictet Asset Management SA 3,247,888 Mar 30, 2022 2.27% 165,073,910 Primecap Management Company 3,026,150 Mar 30, 2022 2.12% 153,804,076 Goldman Sachs Group Inc 2,649,958 Mar 30, 2022 1.86% 134,684,117 CEO: Time:Before market Estimate:+7%