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How Capri Holdings (CPRI) is Poised Ahead of Q2 Earnings

·3 min read

Capri Holdings Limited CPRI is likely to register year-over-year increases in both the top and the bottom line when it releases second-quarter fiscal 2022 earnings on Nov 3, before market open. The Zacks Consensus Estimate for the quarterly earnings has been stable in the past 30 days at 95 cents and suggests a rise of more than 5% from the year-earlier quarter’s reported number.

The consensus estimate of $1,263 million for quarterly revenues suggests growth of about 14% from the prior-year quarter’s tally.

A glance at this luxury accessories and footwear company’s performance in the trailing four quarters shows that it delivered an earnings surprise of 1,306%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by 79.8%.

Factors to Note

Capri Holdings’ quarterly performance might have benefited from increased demand for apparel and accessories as well as sturdy e-commerce business and brand strength. The fashion and apparel space looks quite upbeat, thanks to the mass inoculation and relaxation in the pandemic-led restrictions. The company is reinforcing its position in the luxury fashion space. It has been deploying resources for a while to expand its product offerings and upgrade the distribution infrastructure.

During its last earnings call on Jul 30, management had envisioned revenues for the fiscal second quarter to be $1.25 billion. For the same period, Capri Holdings estimated revenues of approximately $260 million from Versace, $120 million from Jimmy Choo and $870 million from Michael Kors.

Management guided about a 50 basis-point expansion for gross margin and leveraged expenses for the to-be-reported quarter. This will result in an approximate 200-basis point expansion in the operating margin to 13%. The company also projected operating margin in the low-double-digit range for Versace, in the negative low double-digit range for Jimmy Choo and in the low 20% range for Michael Kors. It forecast earnings of 90 cents a share for the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict 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 odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Capri Holdings Limited Price and EPS Surprise

Capri Holdings Limited Price and EPS Surprise
Capri Holdings Limited Price and EPS Surprise

Capri Holdings Limited price-eps-surprise | Capri Holdings Limited Quote

Capri Holdings currently has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%, making surprise prediction difficult.

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat on earnings this season:

Hanesbrands HBI has an Earnings ESP of +1.06% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICK'S Sporting Goods DKS has an Earnings ESP of +10.27% and a Zacks Rank #3, currently.

Five Below FIVE has an Earnings ESP of +3.90% and a Zacks Rank of 3, presently.

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DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report

Hanesbrands Inc. (HBI) : Free Stock Analysis Report

Five Below, Inc. (FIVE) : Free Stock Analysis Report

Capri Holdings Limited (CPRI) : Free Stock Analysis Report

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