Why Capri Holdings Stock Is Plunging Wednesday

Capri Holdings Ltd CPRI shares are down 20% Wednesday morning after the company reported worse-than-expected financial results and lowered its outlook.

Q3 Results: Capri said fiscal third-quarter revenue decreased 6% year-over-year to $1.51 billion, which missed average analyst estimates of $1.53 billion. The luxury goods retailer reported third-quarter adjusted earnings of $1.84 per share, which missed estimates of $2.22 per share. 

"Overall, our performance in the third quarter was more challenging than anticipated ... we were disappointed with the performance of our global wholesale business in the quarter which resulted in expense deleverage and a lower operating margin," said John Idol, chairman and CEO of Capri Holdings.

"We have begun taking measures to better align operating expenses with the change in revenue by channel. At the same time we will continue to make strategic investments to drive long term growth," 

Outlook: Capri lowered it's fourth-quarter revenue guidance from $1.4 billion to $1.275 billion versus estimates of $1.41 billion. The company lowered its fourth-quarter earnings outlook from $1.35 to a range of 90 cents to 95 cents per share.

Capri also lowered its full-year 2023 revenue guidance from $5.7 billion to $5.56 billion. The company cut its full-year earnings forecast from $6.85 per share to $6.10 per share versus estimates of $6.76 per share. 

Capri said it expects full-year 2024 revenue of $5.8 billion versus estimates of $6.02 billion. The company sees full-year 2024 earnings of approximately $6.40 per share versus estimates of $7.24 per share.

See Also: Nasdaq, S&P Futures Dip As Fed's Data-Dependency Introduces Caution — Disney Earnings On Tap

CPRI Price Action: Capri has a 52-week high of $72.37 and a 52-week low of $36.90.

The stock was down 20.1% at $53 at time of publication, according to Benzinga Pro.

Photo: StockSnap from Pixabay.

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