Capri Holdings Shares Surge On Q2 Beat, Upbeat Outlook

Capri Holdings Ltd CPRI reported second-quarter FY22 sales growth of 17.1% year-on-year, to $1.30 billion, beating the analyst consensus of $1.27 billion.
Versace revenue increased 45% Y/Y to $282 million, Jimmy Choo rose 12% to $137 million, and Michael Kors revenue expanded 11% to $881 million.
Gross profit rose 24.5% Y/Y to $884 million, and gross margin expanded 400 basis points to 68%. Adjusted gross margin expanded 440 basis points to 67.6%.
The operating margin expanded 120 basis points to 15%, and operating income for the quarter amounted to $195 million.
Operating expenses increased 23.7% Y/Y to $689 million.
The company held $234 million in cash and equivalents as of September 25, 2021.
Adjusted EPS of $1.53 beat the analyst consensus of $0.95.
Net inventory on September 25, 2021, was $866 million, a 6.9% decrease Y/Y.
The board of directors has announced a $1 billion share buyback. The new two-year program will replace the existing $500 million program, which had $250 million of availability remaining.
Outlook: Capri raised FY22 EPS guidance to about $5.30 (prior view $4.50), above the consensus of $4.57. The company expects FY22 revenue of $5.4 billion (prior view $5.3 billion) versus the consensus of $5.31 billion.
Capri expects Q3 EPS of $1.65 against the consensus of $1.57. The company expects Q3 revenue of $1.46 billion versus the consensus of $1.44 billion.
Price Action: CPRI shares are trading higher by 12.76% at $62.62 on the last check Wednesday.

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