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Capri Holdings Ltd CPRI

Morningstar Rating
$45.81 −0.32 (0.69%)
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Company Report

Capri Earnings: Deal Moving Forward Despite Uninspiring Results; Shares Attractive

Capri reported third-quarter fiscal 2024 sales and earnings that fell short of our expectations. The firm is not holding earnings calls or providing guidance as it awaits its sale to Tapestry. Although Capri’s recent results have been disappointing, we think the deal will close in 2024 at the original terms and therefore, we hold our fair value estimate at $57 per share. We view Capri’s shares as attractive at the current discount of about 18% to this price. Separately, we rate Tapestry’s shares as undervalued in relation to our $60 fair value estimate, which is based on a postmerger model. Led by Coach’s 6% sales growth, Tapestry surpassed our expectations in its end-December quarter.

Price vs Fair Value

CPRI is trading at a 20% discount.
Price
$45.81
Fair Value
$86.00
Uncertainty
Very High
1-Star Price
$99.14
5-Star Price
$78.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Capri has agreed to be acquired by Tapestry for $57 per share.

Bears

There is risk that the sale of Capri could fall through due to antitrust concerns or other reasons.

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News

Trading Information

Previous Close Price
$46.13
Day Range
$45.7646.37
52-Week Range
$34.1754.52
Bid/Ask
$45.75 / $45.92
Market Cap
$5.34 Bil
Volume/Avg
988,147 / 1.0 Mil

Key Statistics

Price/Earnings (Normalized)
11.34
Price/Sales
1.04
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
9.49%

Company Profile

Michael Kors, Versace, and Jimmy Choo are the brands of Capri Holdings, a marketer, distributor, and retailer of upscale accessories and apparel. Michael Kors, Capri’s largest brand, offers handbags, footwear, and apparel through more than 800 company-owned stores, wholesale, and e-commerce. Versace (acquired in 2018) is known for its ready-to-wear luxury fashion, while Jimmy Choo (acquired in 2017) is best known for women’s luxury footwear. John Idol has served as CEO since 2003.
Sector
Consumer Cyclical
Industry
Luxury Goods
Stock Style Box
Small Value
Total Number of Employees
15,500

Competitors

Valuation

Metric
CPRI
RL
MC
Price/Earnings (Normalized)
11.3419.4527.87
Price/Book Value
2.754.606.93
Price/Sales
1.041.884.92
Price/Cash Flow
11.1913.7718.43
Price/Earnings
CPRI
RL
MC

Financial Strength

Metric
CPRI
RL
MC
Quick Ratio
0.341.460.58
Current Ratio
1.062.171.32
Interest Coverage
9.8718.2323.09
Quick Ratio
CPRI
RL
MC

Profitability

Metric
CPRI
RL
MC
Return on Assets (Normalized)
6.50%9.42%11.43%
Return on Equity (Normalized)
24.88%26.42%27.46%
Return on Invested Capital (Normalized)
8.92%11.88%16.81%
Return on Assets
CPRI
RL
MC
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Luxury Goods Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
LVMHF
Lvmh Moet Hennessy Louis Vuitton SESswsq$456.8 Bil
LVMUY
Lvmh Moet Hennessy Louis Vuitton SE ADRHvks$456.8 Bil
HESAF
Hermes International SANhrd$261.2 Bil
HESAY
Hermes International SA ADRPgtc$261.2 Bil
CHDRF
Christian Dior SERykzl$156.9 Bil
CHDRY
Christian Dior SE ADRHjnx$156.9 Bil
SWGAY
The Swatch Group AG ADRNzvqtml$12.2 Bil
TPR
Tapestry IncSmgdx$10.8 Bil
REAL
The RealReal IncHchtm$288.9 Mil

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