Skip to content

Stock Decline of Capri Holdings Today

Financial difficulties significantly skewed the financial standing for the given company, heavily impacting their overall financial health.

Fall of Capri Holdings Shares Today Explained
Fall of Capri Holdings Shares Today Explained

Stock Decline of Capri Holdings Today

Capri Holdings' Q4 Results and Stock Decline

Capri Holdings, the parent company of luxury fashion brands such as Michael Kors and Versace, reported its financial results for the fourth quarter of 2023 on April 1. Despite the revenue decline, the company's revenue was about 5% higher than management's guidance. However, the company's stock declined on the same day, reaching 52-week lows.

The company spent $400 million on share repurchases in Q4, rewarding shareholders with profits. Capri Holdings' management expects revenue of $5.7 billion for fiscal 2024, a modest top-line growth, but major improvements in profitability year over year. They are guiding for an operating margin of 16.5% for fiscal 2024, up from the 12% achieved in fiscal 2023, which resulted in diluted EPS of $4.60.

The financial results showed a revenue of $1.3 billion, a decrease of 10.5% compared to the previous year. This led to a loss from operations of $40 million compared to operating income of $119 million in the prior-year period. Despite these financial results, Capri Holdings is still growing, and profits are expected to rebound.

The exact reason for Capri Holdings’ stock decline on April 1 cannot be definitively determined from the given information. Stock price declines despite strong quarters can occur due to various factors such as market expectations being even higher than reported results, investor concerns about future guidance, macroeconomic conditions, or competitive pressures. Profit-taking after run-ups ahead of earnings, broader market sell-offs, or sector-specific headwinds could also be contributing factors.

Capri Holdings still has $400 million of buyback authorization remaining, indicating the company's commitment to returning value to its shareholders. The company's stock, ticker symbol CPRI, isn't the highest conviction idea for a market-beating investment, but it remains an interesting play in the luxury fashion sector.

As for the future, Capri Holdings' management expects to continue its growth trajectory, with strategic initiatives progressing and improving trends. The company will release its Q1 2024 results in due course, providing further insights into its financial performance and stock performance.

  1. Investors might be wary of further financial performance due to Capri Holdings' stock decline, despite the company investing $400 million in share repurchases and expecting revenue growth in personal-finance and business sectors.
  2. A long-term view of Capri Holdings as an investment opportunity could be facilitated by understanding the underlying factors influencing the stock decline, such as higher market expectations, investor concerns, macroeconomic conditions, or competitive pressures.
  3. For those interested in the luxury fashion sector, it is essential to keep a close eye on Capri Holdings' Q1 2024 results and any subsequent changes in their financial performance and stock price, as the remaining $400 million of buyback authorization indicates the company's continued commitment to returning value to shareholders.

Read also:

    Latest