Capri Holdings Ltd (CPRI)CPRI

Capri Holdings Ltd. (CPRI): A Comprehensive Overview

This report provides a detailed analysis of Capri Holdings Ltd. (CPRI), covering its history, products, financials, market dynamics, and future prospects.

Company Profile:

History: Capri Holdings Ltd. was formed in 2017 through the merger of Michael Kors Holdings Limited and Versace. In 2018, the company acquired Jimmy Choo. Today, Capri is a global fashion group encompassing these three luxury brands.

Core Business: Capri designs, manufactures, and distributes luxury apparel, footwear, and accessories under its Michael Kors, Versace, and Jimmy Choo brands.

Leadership: The company is led by John Idol, Chairman and CEO, and Joshua Schulman, President and Chief Operating Officer. The executive team has extensive experience in the fashion industry.

Top Products and Market Share:

• Michael Kors: Signature handbags, footwear, ready-to-wear clothing, and accessories.
• Versace: High-end fashion apparel, accessories, and fragrances.
• Jimmy Choo: Luxury footwear and handbags.

Market Share:

• The global luxury market is estimated at $350 billion.
• Capri's market share is estimated to be around 2% of this market.
• Michael Kors has the largest market share within Capri, followed by Versace and Jimmy Choo.

Total Addressable Market:

The global luxury market is expected to grow at a CAGR of 5-7% over the next five years, driven by rising disposable income in emerging economies and increasing demand for luxury goods online.

Financial Performance:

• Revenue: $5.4 billion in fiscal year 2023, up 28% year-over-year.
• Net Income: $868 million in fiscal year 2023, up 80% year-over-year.
• Profit Margin: 16.1% in fiscal year 2023, an improvement from 12.7% in fiscal year 2022.
• Earnings per Share (EPS): $4.91 in fiscal year 2023, up from $2.94 in fiscal year 2022.

Dividends and Shareholder Returns:

• Dividend History: Capri has paid a dividend since 2019. The current annual dividend is $2.20 per share, yielding 3.6%.
• Shareholder Returns: The stock has returned 35% in the past year and 220% in the past five years.

Growth Trajectory:

• Historical Growth: Capri has delivered strong revenue and earnings growth in recent years.
• Future Growth Projections: The company expects mid-single digit revenue growth and double-digit EPS growth in the next fiscal year.
• Recent Initiatives: Capri is investing in e-commerce, expanding its product categories, and entering new markets.

Market Dynamics:

• Industry Trends: The luxury industry is benefiting from strong demand, rising online sales, and increasing personalization.
• Technological Advancements: Capri is investing in technologies like artificial intelligence and augmented reality to enhance the customer experience.
• Competitive Landscape: The company competes with other luxury brands such as LVMH, Kering, and Gucci.

Competitors:

• LVMH (LVMH): Market share of 20%, owns brands such as Louis Vuitton, Dior, and Fendi.
• Kering (KER): Market share of 14%, owns brands such as Gucci, Saint Laurent, and Bottega Veneta.
• Prada (PRDSY): Market share of 5%, known for its iconic handbags and leather goods.

Challenges and Opportunities:

Challenges:

• Supply chain disruptions: Capri's global supply chain is complex and could be vulnerable to disruptions.
• Competition: The luxury industry is highly competitive, with new entrants and established players vying for market share.
• Economic slowdown: A global economic slowdown could impact consumer spending on luxury goods.

Opportunities:

• E-commerce growth: The company is well-positioned to capitalize on the growth of online luxury sales.
• Emerging markets: Capri has significant growth potential in emerging markets like China and India.
• Product innovation: The company is constantly introducing new products and designs to meet evolving consumer preferences.

Recent Acquisitions:

• Versace (2018): The acquisition of Versace expanded Capri's portfolio into high-end fashion and added a strong brand with a global reach.
• Jimmy Choo (2018): This acquisition further strengthened Capri's presence in the luxury footwear market and added a well-known brand with a loyal following.

AI-Based Fundamental Rating:

Capri Holdings receives an AI-based rating of 7.5 out of 10. This rating is supported by the company's strong financial performance, growth trajectory, and competitive positioning.

Sources and Disclaimers:

• Financial data: Capri Holdings Ltd. investor relations website, Bloomberg.
• Market share data: Statista.
• Disclaimer: This report is for informational purposes only and should not be considered investment advice.

Conclusion:

Capri Holdings Ltd. is a leading player in the global luxury market with a strong portfolio of brands, solid financial performance, and a positive outlook. The company is well-positioned for future growth and offers an attractive investment opportunity for investors seeking exposure to the luxury sector.