Capri Holdings LimitedCPRI is expected to report a year-over-year decrease in its Q4 earnings and revenue on May 31 before the market opens. According to Zacks, Capri Holdings Q4 revenue is expected to reach $1,275 million, which reflects a decline of 14.5% compared to the previous year. The Q4 earnings per share for the global fashion luxury group would likely decline by 7.8% compared to the previous year, with a Zacks consensus estimate of $0.94.
Factors to Consider
One of the key factors that affected Capri Holdings in Q4 is the ongoing pandemic and the resulting sluggish demand for luxury products and retail restrictions in China. The company’s performance may also have been impacted by macroeconomic challenges, inflationary environments, and weakness in the wholesale channel. Operating expenses and costs of sales are among the other factors affecting Capri Holdings’ performance in recent quarters.
Despite these challenges, Capri Holdings’ retail and e-commerce businesses have seen strong performance thanks to extensive online operations and expansion in customer engagement. Additionally, the return of shoppers interested in luxury products is expected to benefit the company. Also, Capri Holdings has been focusing on expanding offerings, upgrading distribution channels, and investing in omnichannel and digital capabilities to improve its profitability.
Zacks Model Insights
The Zacks model does not predict an earnings beat for Capri Holdings this quarter. An earnings beat is predicted if there is a positive Earnings ESP, plus a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). However, the company has an Earnings ESP of 0.00%, meaning that it is unlikely to beat the estimates this time around.
Final Thoughts
Ultimately, Capri Holdings faces numerous challenges in the current economic climate. Still, the company’s focus on omnichannel and digital capabilities should allow it to build on recent successes in its retail and e-commerce businesses. Although Capri Holdings may be facing short-term challenges, investors should keep a close eye on the company’s long-term strategies.
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