CPRI Stock Forecast & Price Target

Capri Holdings demonstrated robust growth in its Asian market, achieving a 25.4% year-over-year increase in FQ2 driven by higher wholesale shipments, marking a notable turnaround following a period of contraction. The company's brands, including Michael Kors and Jimmy Choo, saw a positive trend with significant year-over-year increases in their global consumer databases, indicating strong engagement and market presence. Additionally, the financial health of Capri Holdings is underscored by a strong cash position of $120 million, setting the stage for anticipated retail improvement and growth in the upcoming fiscal years.

Capri Holdings reported a 2.5% decline in total revenues year-over-year for the second quarter, totaling $856 million, which, while above market forecasts, reflects continued challenges in its core Michael Kors brand, which saw a sales decrease of 1.8% year-over-year. The company's luxury shoe brand, Jimmy Choo, also faced a substantial revenue drop of 6.4%, marking the fourth consecutive quarter of declines across both brands, indicating a persistent downturn in the luxury sector. Additionally, the projected decline in adjusted gross margins and the adverse impact of tariffs on inventory further heighten concerns about potential profitability erosion moving forward.