Capri Holdings (NYSE:CPRI) is a multinational fashion holding company based in New York. Some of its top holdings include Michael Kors, Jimmy Choo, and Versace. Shares have dropped 14.9% in 2019 as of close on September 17. The stock has bounced back 14% over the past month.
The company released its first quarter fiscal 2020 results on August 7. It reported revenue growth of 19%. However, adjusted net income fell to $145 million or $0.95 per share compared to $201 million or $1.32 per share in the prior year. Revenue at Michael Kors and Jimmy Choo dropped 4.8% and 8.7%, respectively, from the prior year. Versace reported a year-over-year increase, but it posted an operating loss of $3 million.
Luxury sales have slowed in the developed world in the back half of this decade. Fortunately, this market is expected to pick up as the global economy improves into the 2020s.
For the full fiscal 2020 year, Capri is projecting revenue of $5.8 billion. This was down from its prior guidance, and the company pointed to unfavourable foreign currency fluctuations and a downturn in Michael Kors’ revenue. Still, Capri has maintained its diluted earnings per share projection of $4.95.
Shares of Capri boast a favourable price-to-earnings ratio of 7.2 and a price-to-book of 2.1. The stock has rebounded from technically oversold territory but is still trading at the low end of its 52-week range. Luxury retail is on track for a rebound as we look ahead to the next decade.
Capri stock has potential after bouncing back from a 52-week low.
