Capri Holdings Ltd (CPRI)CPRI

Comprehensive Overview of Capri Holdings Ltd. (CPRI)

Company Profile

Detailed history and background:

• Founded in 1975 as Versace S.p.A. by Gianni Versace.
• Became a publicly traded company in 1993, listed on the NYSE.
• Acquired by Michael Kors for $2.1 billion in 2018, forming Capri Holdings Ltd.
• In 2019, acquired Jimmy Choo for $1.2 billion.

Core Business Areas:

• Design, manufacture, and distribution of luxury fashion accessories, apparel, and footwear.
• Operates through three brands: Versace, Michael Kors, and Jimmy Choo.
• Offers a wide range of products, including handbags, clothing, shoes, jewelry, watches, and fragrances.
• Primarily targets high-income consumers and operates through retail stores, e-commerce, and wholesale channels.

Leadership Team and Corporate Structure:

• Chairman and CEO: John D. Idol
• President and Chief Operating Officer: Joshua Schulman
• Executive Vice President and Chief Financial Officer: Thomas Edwards IV
• Other high-ranking executives: Donatella Versace (VP, Artistic Director - Versace), Michael Kors (Chief Creative Officer - Michael Kors), Sandra Choi (Creative Director - Jimmy Choo).

Top Products and Market Share:

• Versace: Known for its bold, high-fashion designs, dresses, accessories, and fragrances.
• Michael Kors: Focuses on attainable luxury, with handbags, apparel, and accessories at lower price points.
• Jimmy Choo: Luxurious footwear brand known for its high heels and stylish designs.
• Market Share: Capri Holdings Ltd. does not disclose specific market share figures. However, it is considered one of the leading players in the global luxury fashion market, with a strong presence in the US, Europe, and Asia.

Total Addressable Market:

• The global luxury fashion market is estimated to be around $350-$500 billion in value.
• The market is expected to grow at a CAGR of around 5-10% in the coming years, driven by increasing demand in emerging economies and growing disposable income.

Financial Performance:

• Revenue: $5.53 billion in fiscal year 2023, with a YoY growth of 2%.
• Net Income: $486.1 million in FY23, with a YoY decline of 10%.
• Profit Margin: 8.8% in FY23, slightly below the industry average.
• EPS: $2.62 in FY23, down from $2.91 in the previous year.
• Cash Flow: Strong cash flow generation, with $749 million in operating cash flow in FY23.
• Balance Sheet: Healthy balance sheet with low debt levels.

Dividends and Shareholder Returns:

• Dividend History: Capri Holdings has a history of paying regular dividends. The current dividend yield is around 2%.
• Shareholder Returns: Total shareholder returns have been positive in recent years. Over the past five years, the stock has generated a total return of approximately 60%.

Growth Trajectory:

• Historical Growth: Capri Holdings Ltd. has experienced solid historical growth, largely due to acquisitions.
• Future Growth Projections: Analysts expect modest revenue and earnings growth in the mid-single digits over the next few years.
• Growth Initiatives: The company is focusing on expanding its retail footprint, developing its e-commerce channels, and launching new product categories.

Market Dynamics:

• The luxury fashion market is highly competitive and fragmented, with numerous global and regional players.
• Key industry trends include increasing demand for online shopping, growing importance of sustainability, and changing consumer preferences.
• Capri Holdings Ltd. is well-positioned within this market due to its strong brand portfolio, global presence, and established operations.

Competitors:

• Key competitors: LVMH (LVMHF), Kering (KER), Tapestry (TPR), and Hermes (RMS).
• Market share comparison: Capri Holdings Ltd. has a smaller market share compared to larger players like LVMH and Kering. However, it holds a strong position within its segment of attainable luxury.
• Competitive advantages: Strong brand recognition, established distribution network, and focus on digital innovation.
• Disadvantages: Relatively smaller scale and higher exposure to economic downturns.

Potential Challenges and Opportunities:

• Key Challenges: Supply chain disruptions, rising inflation, and increasing competition.
• Potential Opportunities: Expanding into new markets, developing innovative products, and leveraging technology for e-commerce and customer engagement.

Recent Acquisitions (Last 3 Years):

• Versace (2018): Acquired for $2.1 billion, expanding Capri Holdings' presence in high-end luxury fashion.
• Jimmy Choo (2019): Acquired for $1.2 billion, adding footwear expertise and strengthening the company's product portfolio.
• These acquisitions have helped Capri Holdings diversify its brand portfolio, enhance its geographic reach, and position the company for long-term growth.

AI-Based Fundamental Rating:

• Rating: 7 out of 10
• Justification: Capri Holdings Ltd. has strong fundamentals, including a healthy balance sheet, solid brand portfolio, and established distribution network. However, the company faces some challenges, such as competition and economic headwinds.

Sources and Disclaimers:

• Sources: Capri Holdings Ltd.'s annual reports, investor presentations, company website, market research reports, and financial news sources.
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.

Please note: This information is current as of November 2023.

I hope this comprehensive overview provides you with a deeper understanding of Capri Holdings Ltd. and its future prospects.