Company Overview
Capri Holdings Limited functions as a global designer, marketer, distributor, and retailer of branded women's and men's apparel, footwear, and accessories with a footprint spanning the United States, Canada, Latin America, Europe, the Middle East, Africa, Asia, and Oceania. Operating within the Consumer Cyclical sector and specifically the Luxury Goods industry, the company leverages its brand portfolio to generate revenue across diverse international markets. The enterprise holds a market capitalization of $2.16B and reported annual revenue of $4.33B while employing a workforce of 9,700 individuals. These valuation and revenue figures suggest that the company maintains a significant presence in the luxury retail landscape, though its market cap relative to revenue indicates a specific valuation dynamic common in cyclical consumer goods where earnings volatility can impact market pricing more aggressively than revenue generation.
Financial Health
The company reported a revenue of $4.33B over the trailing twelve months, yet it recorded a net income of -$1,154,000,000, while generating an EBITDA of $189.00M. The substantial disparity between the $4.33B revenue and the negative $1.154B net income reveals a highly leveraged cost structure where interest expenses and other non-operating costs significantly erode bottom-line profitability despite solid top-line sales. Despite the negative net income, the entity produced positive free cash flow of $153.12M, which indicates a degree of financial flexibility allowing the company to meet obligations or fund operations without immediate reliance on external financing. The gross margin stands at 62.8%, reflecting the high pricing power and cost control typical of luxury branding, whereas the operating margin of 5.7% shows that operating expenses consume a large portion of gross profit. The profit margin of -11.7% further underscores the pressure on net earnings, suggesting that factors beyond core operations, such as interest or tax liabilities, are driving the loss. On the balance sheet, the company holds $154.00M in cash against total debt of $1.31B, resulting in a debt-to-equity ratio of 1213.89% that characterizes an extremely leveraged position. The current ratio of 1.14 suggests that the company possesses just enough current assets to cover its current liabilities, indicating a tight but functional short-term liquidity position. Return on Equity is reported at -195.6% and Return on Assets at 0.1%, metrics that collectively reveal that management is currently unable to generate positive returns on the capital invested or assets held, signaling a period of financial distress or restructuring.
Valuation Assessment
The trailing twelve-month P/E ratio is listed as N/A due to the negative net income, while the forward P/E is 9.65, implying that the market expects a significant turnaround in earnings to justify a multiple in the near future. The price-to-book ratio of 20.53 indicates that the stock is trading at a substantial premium relative to its book value, suggesting high investor expectations for future growth or brand value despite current earnings losses. Alternative valuation metrics such as the price-to-sales ratio of 0.50 and an EV/EBITDA of 17.54 provide context for the company's valuation independent of earnings, showing that the market values the company at half its sales revenue. The stock has traded between a 52-week high of $28.27 and a 52-week low of $11.86, with the current market price reflecting a volatile trading range typical of cyclical luxury stocks facing macroeconomic headwinds. The beta of 1.43 indicates that the stock's price volatility is significantly higher than the broader market, meaning the asset is more sensitive to market movements than a standard index stock.
Growth & Income
Revenue growth year-over-year is recorded at -4.0%, while earnings growth is N/A due to the negative net income, indicating that sales are contracting at a rate that has already pushed profitability into the negative territory. As the company does not pay dividends, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, it retains all available earnings for reinvestment rather than distributing income to shareholders. The absence of a dividend payout ratio confirms that the company is in a stage where capital is likely being focused on operational efficiency or debt reduction rather than shareholder returns. Overall, the growth and income profile is defined by negative revenue momentum and zero dividend distribution, highlighting a capital-intensive phase focused on stabilizing operations rather than expanding market share or rewarding income-seeking investors.