Jefferies Downgrades CAPRI HOLDINGS to Hold Due to Macroeconomic Uncertainty
April 27, 2023
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Capri Holdings ($NYSE:CPRI), formerly Michael Kors Holdings, is a global fashion luxury group. It designs, markets, and distributes apparel, footwear, and accessories through a range of retail stores, concession-based shops and digital commerce sites. Recently, Jefferies has downgraded Capri Holdings to a “Hold” rating due to concerns over macroeconomic uncertainty. Jefferies believes that the slowing global economy and the growing trade tensions between the United States and China may lead to a decrease in consumer spending, which could pose a significant risk to Capri Holdings’ business.
Additionally, Jefferies believes that the company’s recent acquisitions of Versace and Jimmy Choo have added debt to its balance sheet which could also be a risk to its future performance. The downgrade from Jefferies comes at an important time for Capri Holdings as it tries to navigate an increasingly volatile market. With macroeconomic worries looming, Capri Holdings must be vigilant in ensuring that its operations remain efficient and that its costs remain low. Only then will it be able to weather any economic storm that might come its way.
Stock Price
This led to a significant drop in the company’s stock price, as it opened at $43.0 and closed at $42.4, representing a 5.7% decrease from the prior closing price of 45.0. As such, investors remain wary of potential downside risk and may be more conservative in their investment decisions. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Capri Holdings. More…
| Total Revenues | Net Income | Net Margin |
| 5.78k | 731 | 13.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Capri Holdings. More…
| Operations | Investing | Financing |
| 607 | 325 | -788 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Capri Holdings. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.55k | 5.33k | 16.35 |
Key Ratios Snapshot
Some of the financial key ratios for Capri Holdings are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 0.4% | 8.4% | 15.9% |
| FCF Margin | ROE | ROA |
| 6.8% | 26.3% | 7.6% |
Analysis
GoodWhale recently conducted an analysis of CAPRI HOLDINGS‘s wellbeing. Our Star Chart report identified that CAPRI HOLDINGS is strong in terms of profitability, but has a medium growth rate and is weak in regards to assets and dividends. After conducting our assessment, we concluded that CAPRI HOLDINGS is classified as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. It is important to note that CAPRI HOLDINGS has a high health score of 8/10 with regard to its cashflows and debt, which is an indication that the company is capable of sustaining future operations in times of crisis. We believe that this makes CAPRI HOLDINGS an attractive option for investors interested in a stable, but moderate return on their investments. Moreover, due to their strong profitability and moderate growth rate, CAPRI HOLDINGS may also be attractive to investors who are seeking a balance between risk and reward. More…
Peers
The fashion industry is extremely competitive, with companies constantly vying for market share. Capri Holdings Ltd is no exception, and must compete against other major players such as Dazzle Fashion Co Ltd, PVH Corp, and Sub-Urban Brands Inc. In order to stay ahead of the competition, Capri Holdings Ltd must continually innovate and offer consumers unique and desirable products.
– Dazzle Fashion Co Ltd ($SHSE:603587)
Dazzle Fashion Co Ltd is a fashion company with a market cap of 6.76B as of 2022. The company has a Return on Equity of 11.66%. The company designs, manufactures, and markets women’s apparel and accessories. The company offers a wide range of products including dresses, tops, bottoms, outerwear, and swimwear. The company operates in two segments: wholesale and retail. The wholesale segment consists of sales to department stores, specialty stores, and e-commerce platforms. The retail segment consists of sales through the company’s own e-commerce platform and brick-and-mortar stores.
– PVH Corp ($NYSE:PVH)
PVH Corp is a publicly traded company with a market capitalization of 3.08 billion as of 2022. The company has a return on equity of 11.85%. PVH Corp is a holding company that operates through its subsidiaries. The company’s businesses include Calvin Klein and Tommy Hilfiger, which design, market, and distribute men’s, women’s, and children’s apparel; and Van Heusen, which designs and markets dress shirts, sportswear, neckwear, footwear, and other related products.
Summary
CAPRI Holdings (formerly Michael Kors Holdings Ltd) is a global fashion company based in the United States. Recent analysis by Jefferies has highlighted macroeconomic concerns surrounding the company, leading to a downgrade of the stock from Buy to Hold. As a result, the stock price has dropped in the same day. Investors should be cautious in investing in CAPRI Holdings, as any further macroeconomic issues could lead to further losses.
Additionally, any negative news or reports relating to the company could further impact the stock price and investor confidence. Investors should perform their own due diligence and research on the company before making an investment decision.
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