Capri (NYSE:CPRI) Q2 2021 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Capri Holdings Limited (NYSE:CPRI) is scheduled to report Q2 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of $0.03/share on revenue of $918 million. The consensus earnings per share (EPS) of $0.03/share is based on a poll of 27 analysts and represents a decline in eps of −97.6% over the same quarter last year, when the company reported earnings of $1.16/share.

The revenue forecast of $918 million based on a poll of 22 analysts implies a year-over-year (YoY) decline in revenue of −36.3%. Last year the company reported $1.442 billion in revenue for the quarter.

Expected to report EPS contraction of −97.6% for Q2, 2021
Metric Expected Prior Year YoY Change
Revenue $917.98 $1,442.00 −36.3%
EPS $0.03 $1.16 −97.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Capri Holdings Limited for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q1, 2021 -$1.11 -$1.04 6.2% Beat
Q4, 2020 $0.16 $0.11 −32.8% Missed
Q3, 2020 $1.59 $1.66 4.6% Beat
Q2, 2020 $1.25 $1.16 −6.9% Missed
Q1, 2020 $0.90 $0.95 5.7% Beat
Q4, 2019 $0.61 $0.63 2.9% Beat
Q3, 2019 $1.58 $1.76 11.6% Beat
Q2, 2019 $1.10 $1.27 15.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by increasing 7.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $14.04 $15.05 7.2% Increase
July 1, 2020 $15.63 $15.23 −2.6% Decline
February 5, 2020 $30.76 $31.34 1.9% Increase
November 6, 2019 $34.09 $35.63 4.5% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.69, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.69 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Capri Holdings Limited is currently trading at $21.24/share, down −6.1% for the day. The company is trading at approximately 53.9% of its 52-week high of $39.90/share. The company’s stock price is up 41.1% since the last earnings report and down −4.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 60.52 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:CPRI Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −7.13 and a forward P/E multiple of 42.52.

Capri Holdings Limited’s current share price also implies a price-to-book (P/B) multiple of 1.59. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2021.Q1
Period End Date June 27, 2020
Stock Price (Current) $21.24
P/E Ratio −7.1x
P/E Ratio (Fwd) 42.5x
PEG Ratio 0.0
Total Debt / Total Capital 53.7%
Levered Free Cash Flow $567 million
EV / EBITDA 11.7x

Finbox

Capri Holdings Limited is a mid-cap stock with a market capitalization of $3.401 billion and a total enterprise value of $7.146 billion. The company operates in the Consumer Discretionary sector and the Textiles, Apparel & Luxury Goods industry.

Capri Holdings Limited designs, markets, distributes, and retails branded women’s and men’s apparel, footwear, and accessories in the United States, Canada, Latin America, Europe, the Middle East, Africa, and Asia. The company’s Versace segment offers ready-to-wear, accessories, footwear, and home furnishings through a distribution network, including boutiques; and department and specialty stores, as well as through Versace e-commerce sites. It also licenses Versace brand name and trademarks to third parties to retail and/or wholesale its products; and has licensing agreements to the manufacture and sale of jeans, fragrances, watches, and eyewear. As of March 28, 2020, this segment operated 206 retail stores, including concessions; and 824 wholesale doors. Its Jimmy Choo segment sells luxury footwear, handbags, and small leather goods through directly operated Jimmy Choo stores; and Jimmy Choo e-commerce sites. It also licenses Jimmy Choo brand name and trademarks to third parties to retail and/or wholesale its products; and has licensing agreements to the manufacture and sale of fragrances, sunglasses, and eyewear. This segment operated 226 retail stores, including concessions; and 554 wholesale doors. The company’s Michael Kors segment offers accessories, footwear, and apparel through retail stores, department stores, specialty stores, and select licensing partners, as well as through Michael Kors e-commerce sites. It also licenses Michael Kors brand name and trademarks to third parties to retail and/or wholesale its products; and has licensing agreements to the manufacture and sale of watches, jewelry, fragrances, and eyewear. This segment operated 839 retail stores, including concessions; and 2,982 wholesale doors. The company was formerly known as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited in December 2018. The company was founded in 1981 and is based in London, the United Kingdom.

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