What Awaits Capri Holdings (CPRI) This Earnings Season?
Capri Holdings Limited CPRI is likely to register a decline in the top line when it reports third-quarter fiscal 2021 numbers on Feb 3, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $1,331 million, suggesting a decline of 15.3% from the prior-year reported figure. Nonetheless, we note that the rate of sales decline is likely to decelerate sharply on a sequential basis. The company had witnessed a decline of 23% in the last-reported quarter.
The Zacks Consensus Estimate for earnings for the quarter under review has increased by 3 cents to $1.01 over the past seven days. The current Zacks Consensus Estimate indicates a sharp improvement from earnings of 90 cents reported in the second quarter. However, the figure still suggests a decline from $1.66 in the year-ago quarter.
Notably, this designer, marketer, distributor and retailer of branded apparel and accessories has a trailing four-quarter earnings surprise of 282.7%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a significant margin.
Factors to Note
Capri Holdings has been witnessing recovery in its top- and bottom-line performances, as matters in the retail space have begun improving with the easing of pandemic-led restrictions. Markedly, the company has been deploying resources to expand product offerings and upgrade distribution infrastructure. This along with cost containment, fleet optimization and e-commerce enhancement bode well. Meanwhile, higher full price sell-throughs, strategic increase in prices and manufacturing cost efficiencies are likely to have benefited margins.
On its last earnings call, management guided a modest improvement in third-quarter revenues on a sequential basis. However, it still projected double-digit decline in sales when compared with the prior-year period. We believe short-term store closures and restrictions in Europe are likely to have impacted revenues to an extent. Moreover, travel retail, which is part of the wholesale channel, has been bearing the brunt of decline in tourism.
We note that the Zacks Consensus Estimate for third-quarter revenues at Michael Kors, Versace and Jimmy Choo brands are pegged at $1,001 million, $170 million and $146 million, indicating declines of 17.3%, 12.8% and 11.5%, respectively, year over year.
Capri Holdings Limited Price, Consensus and EPS Surprise
Capri Holdings Limited price-consensus-eps-surprise-chart | Capri Holdings Limited Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Capri Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Capri Holdings has a Zacks Rank #2 and an Earnings ESP of +11.07%.
Other Stocks With Favorable Combination
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Foot Locker FL has an Earnings ESP of +2.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
L Brands LB has an Earnings ESP of +5.27% and a Zacks Rank #3.
Genesco GCO has an Earnings ESP of +1.63% and a Zacks Rank #3.
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Foot Locker, Inc. (FL) : Free Stock Analysis Report
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