Capri stock sinks following earnings miss, cut to full-year forecast
The Yahoo Finance Live team discusses Capri's stock fall.
SEANA SMITH: Time for our "Triple Play," three stocks that we're watching in the final 30 minutes of trading. We have Capri, Under Armour, and Tripadvisor. Let's kick it off with Capri Holdings. It's a top trending ticker here on Yahoo Finance today. Shares selling off just about 26%. Now this is the retailer that owns Michael Kors, Jimmy Choo, Versace, just to name a few in the portfolio, falling today after missing on estimates and also cutting its annual profit forecast.
The latest sign that consumers are curbing their spending because of those higher prices that we've been talking about. It's certainly a reversal from what we saw last year. CEO John Idle noting that the performance in the third quarter was, quote, "more challenging than anticipated" and is making moves to, quote, "better align operating expenses with the change in revenue."
Now global wholesale pressures were a challenge during the holiday quarter. Simeon Siegel of BMO Capital Markets, who has an outperform rating still on the stock following these results, said that he still sees Capri as, quote, an inexpensive cash generator, but warned that results will likely weigh on the stock in the near term, given the recent run-up that we have seen in shares of Capri Holdings ahead of these results. And Josh, this is just the latest retailer here to warn that consumers are shifting their spending. They're pulling back just a little bit. Certainly seeing some of those concerns reflected in the drop today.
JOSH SCHAFER: And I want to focus in on Michael Kors for a second, too, because we talk a lot about luxury brands, right, and how the luxury consumer stayed so strong. The luxury consumer stayed so strong. And Michael Kors is a little bit of a different luxury brand, right? It's not a Louis Vuitton or one of the really high end brands, but that revenue fell 7% year over year, Dave. And I think that's sort of interesting to see Michael Kors maybe a entry level luxury brand, right? We're kind of starting to get into the luxury section there, sort of on the lower end. It's not Louis Vuitton. It's not Gucci.
DAVE BRIGGS: I don't even think it's in the ballpark.
JOSH SCHAFER: Right, so that consumer, though, that's probably younger, doesn't have quite as much money, is starting to pull back, so we're starting to see even more of a pullback there.
DAVE BRIGGS: Yeah, look, we're just seeing certain sectors. Notice what you mentioned there, the consumer pulling back. We just had a segment on Uber, and Dara Khosrowshahi said he's literally staring for it. He's looking through it. He's combing through reports and said he sees zero pull-back in consumer spending. So, yeah, we see a little bit of it there. But in most sectors so far with earnings, we're, in fact, not seeing it.
SEANA SMITH: Retail, though, certainly has been hit hard. On Uber's position, though, they've got the monopoly. They've got that market share.
DAVE BRIGGS: Maybe that's goods to services--
JOSH SCHAFER: There's not a lot of options.
DAVE BRIGGS: --though, as well--
SEANA SMITH: Yeah, exactly.
DAVE BRIGGS: --when you go from goods to services.
JOSH SCHAFER: Retail, there are so many options, and then something I know we've talked about off air, too, you can go a million different places and buy a different shirt, right? So right now, it's who has a sale. And if you don't have a sale, you're not winning.