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What to Expect From Capri Holdings' (CPRI) Q1 Earnings?

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Capri Holdings Limited (CPRI - Free Report) is likely to register year-over-year increase in its top line when it releases first-quarter fiscal 2023 earnings on Aug 9, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $1,290 million, indicating growth of 2.9% from the prior-year reported figure.

The bottom line of this global fashion luxury group is anticipated to decline year over year. The Zacks Consensus Estimate for first-quarter earnings per share has declined by a penny over the past 30 days to $1.34. The figure suggests a decline of 5.6% from the year-ago period.

Capri Holdings has a trailing four-quarter earnings surprise of 49.3%, on average. In the last reported quarter, this London-based company surpassed the Zacks Consensus Estimate by a margin of 24.4%.

Factors to Note

Consumers’ return to an active social lifestyle has spurred demand for luxury apparel and accessories, and Capri Holdings is likely to have benefited from the same. The company has been deploying resources to expand offerings, upgrade distribution, create seamless omni-channel and digital capabilities, and deepen customer engagement. It has been gaining from selling merchandise at full prices and select price increases.

Capri Holdings’ e-commerce business continues to witness a sturdy performance. The company has been investing in digital analytics and upgrading the e-commerce platform. E-commerce operations were strong in the last reported quarter.

On its last earnings call, management guided first-quarter revenues to be roughly $1.3 billion. Capri Holdings estimated revenues of approximately $265 million from Versace, $155 million from Jimmy Choo, and $880 million from Michael Kors for the to-be-reported quarter, suggesting an increase of 11%, 9% and 1%, respectively.

The Zacks Consensus Estimate for first-quarter revenues at Versace, Jimmy Choo and Michael Kors brands are pegged at $260 million, $155 million and $875 million, indicating an increase of 8.3%, 9.2% and 0.5%, respectively.

While the aforementioned factors instill optimism regarding the outcome of the results, we cannot ignore the impact of product cost inflation, supply chain bottlenecks and the ongoing conflict between Russia and Ukraine. Moreover, pandemic-related restrictions in China might have impacted the sales in the region. On its last earnings call, management guided approximately 40% decline in revenues from Mainland China in the first quarter.

Lower revenues from China, a high margin region; foreign exchange headwinds; and a substantial increase in supply chain costs are expected to have weighed on first-quarter margins. Capri Holdings had projected first-quarter operating margin to be approximately 16.5%, down from 20.8% reported in the year-ago period. The company projected operating margin in the low double-digit range for Versace, the mid-single-digit range for Jimmy Choo and low to mid 20% range for Michael Kors. Evidently, these might get reflected in the to-be-reported quarter’s bottom line. As a result, management guided first-quarter earnings of approximately $1.35 per share, down from $1.42 reported in the prior-year quarter.

Capri Holdings Limited Price, Consensus and EPS Surprise

Capri Holdings Limited Price, Consensus and EPS Surprise

Capri Holdings Limited price-consensus-eps-surprise-chart | Capri Holdings Limited Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Capri Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Capri Holdings currently has a Zacks Rank #3 but an Earnings ESP of -1.25%.

Stocks With Favorable Combination

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:

Dollar General (DG - Free Report) currently has an Earnings ESP of +0.50% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings has risen by a penny over the past seven days to $2.91 per share. The consensus mark for DG’s earnings per share suggests 8.2% growth from the year-ago quarter’s reported number.

Dollar General’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $9.35 billion, which suggests a rise of 8.1% from the figure reported in the prior-year quarter. DG delivered an earnings beat of 2.8%, on average, in the trailing four quarters.

The Children's Place (PLCE - Free Report) currently has an Earnings ESP of +1.03% and a Zacks Rank #3. The company is likely to register bottom-line decline when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 97 cents suggests a decline of 43.3% from the year-ago quarter.

The Children's Place's top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $395.6 million, which indicates a decline of 4.4% from the figure reported in the prior-year quarter. PLCE has a trailing four-quarter earnings surprise of 58%, on average.

Ollie's Bargain (OLLI - Free Report) currently has an Earnings ESP of +6.06% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings per share of 33 cents suggests a decline from 52 cents reported in the year-ago quarter.

Ollie's Bargain’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $457.5 million, indicating an increase of 10% from the figure reported in the year-ago quarter.

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