We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Capri Holdings and Chewy Inc. highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – February 14, 2022 – Zacks Equity Research Shares Capri Holdings (CPRI - Free Report) as the Bull of the Day, Chewy Inc. (CHWY - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Roblox (RBLX - Free Report) , Crocs (CROX - Free Report) and Cedar Fair (FUN - Free Report) .
Capri Holdings is a luxury retail holding company that specializes in men’s and women’s ready-to-wear apparel, accessories, and footwear. Its brand portfolio includes Michael Kors, Jimmy Choo, and Versace, each making up 75%, 10%, and 15% of total revenue, respectively.
Better-Than-Expected Q3 Earnings
Earlier this month, Capri reported strong fiscal third-quarter results.
Sales spiked 24% year-over-year to $1.61 billion, with each of its brands generating double-digit revenue growth. Versace total sales increased 295 to $251 million, while Jimmy Choo and Michael Kors posted revenue of $178 million and $1.18 billion, up 47% and 20%, respectively.
Adjusted earnings came in at $2.22 per share compared to $1.65 in the prior year period. Capri’s bottom line for Q3 also easily beat Wall Street’s consensus of $1.69.
Unsurprisingly, Capri has been impacted by the supply chain crisis, and management noted a 400-basis-point gross margin headwind because of rising costs. Capri also said that inventory levels at stores were lower than planned due to supply chain constraints.
However, the supply chain didn’t stop Capri from raising its outlook for the full year. It’s now targeting earnings of $6.00 per share, up from $5.30 per share it was forecasting in the previous quarter. And for 2023, CEO and Chairman John D. Idol said Capri expects to generate double-digit revenue and earnings growth as well.
Can CPRI Surge Higher?
In the past one year, shares of Capri have climbed about 46%, and over the past six months, the stock gained 12.2% compared to the S&P 500’s marginal 0.4% loss. Estimates have been rising too, and CPRI is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2022, seven analysts revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has jumped $0.66 to $6.00, which matches Capri’s own guidance. Earnings are expected to grow over 215% compared to 2021, and sales could see growth of 37% to $5.56 billion for the year.
Capri has proved that it is well-positioned as the coronavirus pandemic lingers. Recent results showed that it can generate much-needed profits in trying times, utilizing all three of its brands’ popularity in China (where the economy has bounced back and consumers are shopping at pre-pandemic levels) as well as its overall digital strength.
Even though inflation and supply chain chaos persist, management believes that Capri’s ongoing strategic initiatives will help deliver long-term, sustainable growth.
If you’re an investor searching for a luxury retail stock to add to your portfolio, make sure to keep CPRI on your shortlist.
Headquartered in Dania Beach, FL, Chewy Inc. is an online pet retailer that offers a wide variety of pet products like food, toys, mats, biscuits, vitamins, and supplements. The Covid-19 pandemic was an enormous boon for Chewy, with pet owners of all kinds turning to the platform for quick and easy delivery of pet supplies.
Mixed Q3 Earnings
Back in December, Chewy reported third quarter results that concerned Wall Street. Despite meaningful sales growth of 24.1% to $2.2 billion, active customer count increasing 14.7%, and sales per active customer jumping 15.4%, investors focused on year-over-year comparisons between 2021 and 2020.
Sales gains have slowed down, and Chewy’s Q3 2020 revenue growth pales in comparison to the 45% sales increase it reported in Q3 2020. The retailer also posted a loss of $0.08 per share for the period, which was in-line with the same quarter last year.
Slowing sales growth has been an issue for Chewy all fiscal year, and investors have zeroed in on the continuing top line deceleration despite the still-impressive expansion the company achieved last quarter.
Bottom Line
CHWY is a Zacks Rank #5 (Strong Sell).
No analyst has cut their full year earnings outlook over the past 60 days, and the consensus estimate has been steady at a loss of $0.07 per share (90 days ago, analysts were eyeing a profit of $0.11 per share). Chewy’s earnings are expected to plunge about 178% for fiscal 2022, though sales are slated to increase 35% for the same period.
Shares of Chewy are down 45% over the last six months as the stock got caught up in the broad-based tech and growth stock sell-off.
Adding to the stock’s woes is bearishness from some on Wall Street.
Piper Sandler analyst Peter Keith lowered his price target for Chewy to $55 from $70 back in early January. Keith pointed to both sales and expenses headwinds, and he also thinks CHWY should be trading at an enterprise-value-to-sales (EV/S) ratio of 1.8; at its peak, CHWY was selling at an EV/S of over 6.
These warnings from Wall Street, coupled with a tough trading environment for high-flying growth stocks, have led investors to reevaluate CHWY. After its recent slide, shares now trade at a price-to-sales ratio of about 2.
Chewy may continue to experience even more wild ups and downs as growth stocks continue to sell off, so potential investors who want to own CHWY for the long term should proceed with caution.
Additional content:
What's in the Cards for Roblox's (RBLX - Free Report) Q4 Report?
Robloxis set to report fourth-quarter 2021 results on Feb 15.
The Zacks Consensus Estimate for revenues is pegged at $763.11 million. The consensus mark for loss improved by 7.14% at 13 cents per share in the past 30 days.
Roblox’s fourth-quarter performance is expected to have benefited from growth in the company’s community of users and developers. This is expected to have driven sales of Roblox, the currency used in Roblox, thereby aiding the top line.
The company’s fastest-growing demographic is between 17-to 24-year-olds. The Roblox developer community has been focused on tackling this expanding market with a robust content portfolio, updates and more innovative experiences featuring visuals and effects.
The company is expected to have benefited from the strong cash flow generated from Robux sales. Users spend Robux on experiences and items for their avatars, while developers and creators earn Robux by building experiences and items for users.
As measured on Jan 1, 2022, the median user on Roblox visited 40 unique experiences over the course of 2021.
In third-quarter 2021, the average daily active users (DAU) reached 47.3 million, up 31% year over year. Average bookings per DAU (ABPDAU) were $13.49, reflecting a 1.75% decline year over year. The game was offline for three days between Oct 28 and Oct 31.
Roblox also reported a 43% year-over-year growth in daily active users during the first 27 days of October 2021.
Roblox reported 54% growth in its user base, reaching 50 million, as of November 2021, from 32.6 million. The to-be-reported quarter’s performance is expected to have benefited from robust growth in daily active users.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Roblox has an Earnings ESP of +19.23% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
CROX is up 32.4% in the past year against the Zacks Textile – Apparel industry’s decline of 4.1% and the Consumer Discretionary sector’s fall of 20% in the past year.
Cedar Fairhas an Earnings ESP of +6.02% and a Zacks Rank #1. The company is set to announce fourth-quarter 2021 results on Feb 16.
FUN is up 39.6% in the past year against the Zacks Leisure and Recreation Services industry’s decline of 3.9% and the Consumer Discretionary sector’s fall of 20%.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Capri Holdings and Chewy Inc. highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – February 14, 2022 – Zacks Equity Research Shares Capri Holdings (CPRI - Free Report) as the Bull of the Day, Chewy Inc. (CHWY - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Roblox (RBLX - Free Report) , Crocs (CROX - Free Report) and Cedar Fair (FUN - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Capri Holdings is a luxury retail holding company that specializes in men’s and women’s ready-to-wear apparel, accessories, and footwear. Its brand portfolio includes Michael Kors, Jimmy Choo, and Versace, each making up 75%, 10%, and 15% of total revenue, respectively.
Better-Than-Expected Q3 Earnings
Earlier this month, Capri reported strong fiscal third-quarter results.
Sales spiked 24% year-over-year to $1.61 billion, with each of its brands generating double-digit revenue growth. Versace total sales increased 295 to $251 million, while Jimmy Choo and Michael Kors posted revenue of $178 million and $1.18 billion, up 47% and 20%, respectively.
Adjusted earnings came in at $2.22 per share compared to $1.65 in the prior year period. Capri’s bottom line for Q3 also easily beat Wall Street’s consensus of $1.69.
Unsurprisingly, Capri has been impacted by the supply chain crisis, and management noted a 400-basis-point gross margin headwind because of rising costs. Capri also said that inventory levels at stores were lower than planned due to supply chain constraints.
However, the supply chain didn’t stop Capri from raising its outlook for the full year. It’s now targeting earnings of $6.00 per share, up from $5.30 per share it was forecasting in the previous quarter. And for 2023, CEO and Chairman John D. Idol said Capri expects to generate double-digit revenue and earnings growth as well.
Can CPRI Surge Higher?
In the past one year, shares of Capri have climbed about 46%, and over the past six months, the stock gained 12.2% compared to the S&P 500’s marginal 0.4% loss. Estimates have been rising too, and CPRI is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2022, seven analysts revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has jumped $0.66 to $6.00, which matches Capri’s own guidance. Earnings are expected to grow over 215% compared to 2021, and sales could see growth of 37% to $5.56 billion for the year.
Capri has proved that it is well-positioned as the coronavirus pandemic lingers. Recent results showed that it can generate much-needed profits in trying times, utilizing all three of its brands’ popularity in China (where the economy has bounced back and consumers are shopping at pre-pandemic levels) as well as its overall digital strength.
Even though inflation and supply chain chaos persist, management believes that Capri’s ongoing strategic initiatives will help deliver long-term, sustainable growth.
If you’re an investor searching for a luxury retail stock to add to your portfolio, make sure to keep CPRI on your shortlist.
Bear of the Day:
Headquartered in Dania Beach, FL, Chewy Inc. is an online pet retailer that offers a wide variety of pet products like food, toys, mats, biscuits, vitamins, and supplements. The Covid-19 pandemic was an enormous boon for Chewy, with pet owners of all kinds turning to the platform for quick and easy delivery of pet supplies.
Mixed Q3 Earnings
Back in December, Chewy reported third quarter results that concerned Wall Street. Despite meaningful sales growth of 24.1% to $2.2 billion, active customer count increasing 14.7%, and sales per active customer jumping 15.4%, investors focused on year-over-year comparisons between 2021 and 2020.
Sales gains have slowed down, and Chewy’s Q3 2020 revenue growth pales in comparison to the 45% sales increase it reported in Q3 2020. The retailer also posted a loss of $0.08 per share for the period, which was in-line with the same quarter last year.
Slowing sales growth has been an issue for Chewy all fiscal year, and investors have zeroed in on the continuing top line deceleration despite the still-impressive expansion the company achieved last quarter.
Bottom Line
CHWY is a Zacks Rank #5 (Strong Sell).
No analyst has cut their full year earnings outlook over the past 60 days, and the consensus estimate has been steady at a loss of $0.07 per share (90 days ago, analysts were eyeing a profit of $0.11 per share). Chewy’s earnings are expected to plunge about 178% for fiscal 2022, though sales are slated to increase 35% for the same period.
Shares of Chewy are down 45% over the last six months as the stock got caught up in the broad-based tech and growth stock sell-off.
Adding to the stock’s woes is bearishness from some on Wall Street.
Piper Sandler analyst Peter Keith lowered his price target for Chewy to $55 from $70 back in early January. Keith pointed to both sales and expenses headwinds, and he also thinks CHWY should be trading at an enterprise-value-to-sales (EV/S) ratio of 1.8; at its peak, CHWY was selling at an EV/S of over 6.
These warnings from Wall Street, coupled with a tough trading environment for high-flying growth stocks, have led investors to reevaluate CHWY. After its recent slide, shares now trade at a price-to-sales ratio of about 2.
Chewy may continue to experience even more wild ups and downs as growth stocks continue to sell off, so potential investors who want to own CHWY for the long term should proceed with caution.
Additional content:
What's in the Cards for Roblox's (RBLX - Free Report) Q4 Report?
Robloxis set to report fourth-quarter 2021 results on Feb 15.
The Zacks Consensus Estimate for revenues is pegged at $763.11 million. The consensus mark for loss improved by 7.14% at 13 cents per share in the past 30 days.
Roblox Corporation price-consensus-eps-surprise-chart | Roblox Corporation Quote
Factors to Consider
Roblox’s fourth-quarter performance is expected to have benefited from growth in the company’s community of users and developers. This is expected to have driven sales of Roblox, the currency used in Roblox, thereby aiding the top line.
The company’s fastest-growing demographic is between 17-to 24-year-olds. The Roblox developer community has been focused on tackling this expanding market with a robust content portfolio, updates and more innovative experiences featuring visuals and effects.
The company is expected to have benefited from the strong cash flow generated from Robux sales. Users spend Robux on experiences and items for their avatars, while developers and creators earn Robux by building experiences and items for users.
As measured on Jan 1, 2022, the median user on Roblox visited 40 unique experiences over the course of 2021.
In third-quarter 2021, the average daily active users (DAU) reached 47.3 million, up 31% year over year. Average bookings per DAU (ABPDAU) were $13.49, reflecting a 1.75% decline year over year. The game was offline for three days between Oct 28 and Oct 31.
Roblox also reported a 43% year-over-year growth in daily active users during the first 27 days of October 2021.
Roblox reported 54% growth in its user base, reaching 50 million, as of November 2021, from 32.6 million. The to-be-reported quarter’s performance is expected to have benefited from robust growth in daily active users.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Roblox has an Earnings ESP of +19.23% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Crocs has an Earnings ESP of 0.00% and a Zacks Rank #1. The company is set to announce fourth-quarter fiscal 2021 results on Feb 16. You can see the complete list of today’s Zacks #1 Rank stocks here.
CROX is up 32.4% in the past year against the Zacks Textile – Apparel industry’s decline of 4.1% and the Consumer Discretionary sector’s fall of 20% in the past year.
Cedar Fairhas an Earnings ESP of +6.02% and a Zacks Rank #1. The company is set to announce fourth-quarter 2021 results on Feb 16.
FUN is up 39.6% in the past year against the Zacks Leisure and Recreation Services industry’s decline of 3.9% and the Consumer Discretionary sector’s fall of 20%.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
See Stocks Now >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.