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In a challenging retail environment, Capri Holdings Limited (NYSE:CPRI), the parent company of luxury fashion brands including Michael Kors, has seen its stock price tumble to $18.7, near its 52-week low. With an impressive gross profit margin of 64% and a beta of 2.1 indicating high volatility, InvestingPro analysis suggests the stock is currently trading near its Fair Value. The company, which has been grappling with the impact of global economic pressures and changing consumer trends, has experienced a significant decline over the past year. Investors have witnessed a stark 1-year change in the stock’s performance, with Capri Holdings’ shares plummeting by -55.38%. This decline comes as 15 analysts have revised their earnings expectations downward, reflecting broader concerns in the luxury goods market and potential shifts in the company’s strategy to adapt to the evolving retail landscape. InvestingPro subscribers can access 12 additional key insights about CPRI’s financial health and future prospects.
In other recent news, Capri Holdings is reportedly nearing a deal with Prada (OTC:PRDSY) to sell Versace for approximately €1.5 billion ($1.6 billion). This potential acquisition follows Capri’s previous purchase of Versace in 2018 for around €1.8 billion. In addition to the acquisition news, Capri Holdings has faced a downgrade in its credit rating by S&P Global from ’BBB-’ to ’BB’ due to performance pressures and high leverage. The company’s total revenue declined by 11.6% in the third fiscal 2025 quarter, with significant drops in sales for Versace, Michael Kors, and Jimmy Choo.
Jefferies has maintained a Hold rating for Capri Holdings with a $21 price target, noting the company’s confidence in its turnaround strategy for brands like Michael Kors and Versace. Capri Holdings announced its long-term financial targets during its 2025 Investor Day, projecting revenue growth from $4.4 billion in fiscal year 2025 to $6.3 billion in the future. The company aims to improve operating margins, with Michael Kors expected to reach the low-20 percent range. Meanwhile, Prada is evaluating a potential bid for Versace, but no formal offer has been made yet. These developments reflect ongoing strategic adjustments and market evaluations within Capri Holdings and the luxury fashion sector.
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