Capri Holdings Posts Wider Loss In Q4

Capri Holdings reported a significant Q4 net loss of $645 million, or $5.44 per share, a decline from the previous year's $472 million loss, with total revenue decreasing by 15.4% to $1.0 billion. The company projects total revenue of $3.3 to $3.4 billion and earnings per share between $1.20 and $1.40 for fiscal year 2026 and expects Q1 revenue between $765 and $780 million with earnings per share between $0.10 and $0.15.

Analysis

Capri Holdings (CPRI) reported a significantly wider net loss for the fourth quarter, amounting to $645 million, or $5.44 per share, compared to a $472 million loss, or $4.03 per share, in the prior-year period. On an adjusted basis, the company experienced a substantial reversal, posting an adjusted net loss of $581 million, or $4.90 per share, against an adjusted net income of $50 million, or $0.42 per share, a year earlier. This downturn was mirrored in total revenue, which decreased by 15.4% to $1.0 billion, or 14.1% on a constant currency basis, indicating considerable operational challenges. Despite these results, Capri Holdings has issued forward guidance, projecting total revenue for fiscal year 2026 to be approximately $3.3 to $3.4 billion, with earnings per share anticipated in the range of $1.20 to $1.40. For the first quarter, the company expects total revenue of approximately $765 to $780 million and earnings per share between $0.10 and $0.15. The Q4 performance underscores a difficult operating environment and financial strain, consistent with the strongly negative sentiment associated with this earnings announcement.

Key Decisions for Investors

• Investors should critically assess the viability of Capri Holdings achieving its fiscal 2026 revenue and EPS targets of $3.3-$3.4 billion and $1.20-$1.40 respectively, in light of the severe Q4 profit deterioration and 15.4% revenue decline.
• The sharp swing from a Q4 adjusted net income of $0.42 per share in the prior year to an adjusted net loss of $4.90 per share warrants careful monitoring of the company's turnaround efforts and cost management strategies.
• Upcoming Q1 results, against the guided revenue of $765-$780 million and EPS of $0.10-$0.15, will be a key early indicator of the company's ability to stabilize performance and progress towards its longer-term financial objectives.