Capri Holdings (CPRI) to release fourth quarter results: what’s in store for us?

Capri Holdings Limited CPRI will likely record a drop from the top line when it releases FY2021 fourth quarter numbers on May 26, before the market opens. Zacks’ consensus estimate for revenue is set at $ 1,032 million, which suggests a decrease of 13.4% from the previous year’s figure.

Zacks’ consensus estimate for the loss for the quarter under review has improved by a dime over the past seven days to 1 dime. However, Zacks’ current consensus estimate points to a steep decline from adjusted earnings of 11 cents in the last year’s quarter.

Consensus estimates for revenue and earnings for fiscal 2021 are estimated at $ 3,892 million and $ 1.51 per share, respectively, indicating a decline of 30% and 61.2%.

In particular, this designer, marketer, distributor and retailer of branded clothing and accessories recorded a surprise revenue of 296.1% on average over four quarters. In the last reported quarter, the company’s bottom line surpassed Zacks’ consensus estimate by a significant margin.

Factors to note

In its third quarter fiscal 2021 earnings call, management warned that the short term would be more difficult as the resurgence of the virus resulted in additional restrictions and store closures. As of February 3, 2021, around 50% of stores were closed in the EMEA region, up from around 40% at the end of the third quarter.

We note that the company guided fourth quarter revenue at a rate equivalent to third quarter. He also predicted a decline in revenue for fiscal 2021 of around 30%. Again, the company is forecasting a marginal loss per share for the last quarter.

We note that Zacks’ consensus estimate for the fourth quarter revenue of the Michael Kors, Versace and Jimmy Choo brands is set at $ 724 million, $ 202 million and $ 81 million, indicating declines of 17%, 5.2% and 24.3%, respectively, year over year. .

Nonetheless, Capri Holdings has strengthened its position in the luxury fashion space. Remarkably, the company has deployed resources to expand its product offerings and upgrade the distribution infrastructure. This, along with cost containment, fleet optimization and improved e-commerce, bodes well. At the same time, higher full-price sales, strategic price increases, and savings in manufacturing costs likely benefited margins.

For the fourth quarter, management projected an improvement of approximately 100 basis points in gross margin through increased full-price sales and selective price increases. The company had guided the expansion of its gross margin by about 300 basis points for the year.

Capri Holdings Limited price, consensus and surprise on EPS

Capri Holdings Limited Price-Consensus-EPS-Surprise-Chart | Limited quote from Capri Holdings

What the Zacks model reveals

Our proven model predicts a profit beating for Capri Holdings this time around. The combination of a positive ESP benefits and a Zacks # 1 (Strong Buy), 2 (Buy) or 3 (Hold) rank increases the chances of beating the winnings. You can discover the best stocks to buy or sell before they are flagged with our Income ESP Filter.

Capri Holdings has a Zacks No. 2 rank and an ESP gain of + 600.0%.

Other actions with a favorable combination

Here are a few other businesses you might want to consider, as our model shows that they also have the right combination of elements to show a revenue beat:

Best buy BBY has + 6.79% gain ESP and Zacks # 3 rank. You can see The full list of current Zacks # 1 Rank stocks here.

Costco COST has an ESP gain of + 2.75% and a Zacks # 3 rank.

Ulta Beauty The ULTA has an ESP of + 10.22% earnings and a Zacks # 3 rank.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

About Alma Ackerman

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