These Analysts Revise Their Forecasts On Capri Holdings Following Q4 Results

Capri Holdings (CPRI) reported mixed Q4 results, with an adjusted loss per share of $4.90, missing estimates, while revenue of $1.035 billion beat expectations. Despite lowered fiscal 2026 sales guidance to $3.30-3.40 billion, the company projects adjusted EPS of $1.20-$1.40, exceeding analyst estimates; Q1 revenue is projected at $765-780 million. Following the announcement, several analysts adjusted their price targets, and the stock rose 2.1% to $18.42.

Analysis

Capri Holdings Limited (CPRI) reported a divergent fourth-quarter performance, with quarterly sales of $1.035 billion (a 15.4% year-over-year decline) exceeding the consensus estimate of $986.57 million, while its adjusted loss per share of $4.90 significantly missed the anticipated 14 cents loss. Management acknowledged ongoing uncertainty from factors such as tariffs but affirmed commitment to strategic initiatives designed to achieve $4 billion in revenue for Michael Kors and $800 million for Jimmy Choo over time, alongside restoring double-digit operating margins. The company's forward guidance presents a mixed picture: fiscal 2026 adjusted EPS is forecast between $1.20 and $1.40, surpassing the $1.06 analyst estimate, yet the fiscal 2026 sales guidance was sharply reduced to $3.30-$3.40 billion from a prior $4.10 billion, falling below the $4.11 billion consensus. Furthermore, first-quarter revenue is projected at $765-$780 million, considerably lower than the $959.91 million estimate, although Q1 EPS guidance of $0.10-$0.15 is in line with or slightly above the $0.10 estimate. Despite the substantial earnings miss and lowered sales outlook, CPRI shares saw a 2.1% increase to $18.42, suggesting market focus on the stronger-than-expected FY26 EPS guidance or the Q4 revenue beat. Analyst actions were varied, with Telsey Advisory Group raising its price target to $20, JP Morgan lowering its to $18, and UBS increasing its to $18, all maintaining neutral-equivalent ratings.

Key Decisions for Investors

• Investors should scrutinize the significant disconnect between Capri's Q4 EPS miss and lowered sales guidance against its more optimistic FY26 EPS projection and long-term brand targets.
• Careful monitoring of the execution on strategic initiatives, particularly the progress of Michael Kors and Jimmy Choo towards their revenue goals and the company's ability to restore double-digit operating margins, is crucial.
• The positive share price reaction amidst mixed results and predominantly neutral analyst ratings suggests investors should assess if the market is adequately pricing in the substantial near-term revenue headwinds or focusing primarily on long-term recovery potential and management's ability to deliver on future growth.