Lorraine Hutchinson, an analyst from Bank of America Securities, reiterated the Hold rating on Capri Holdings. The associated price target remains the same with $23.00.
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Lorraine Hutchinson’s rating is based on a combination of factors that reflect both potential and challenges for Capri Holdings. The company’s second-quarter revenue exceeded expectations, driven by improvements in Michael Kors and a shift in wholesale timing. However, this positive revenue performance was counterbalanced by a higher tax rate, which led to an earnings per share miss. Despite some signs of recovery, particularly in full-price sales at Michael Kors, the near-term fundamentals remain challenging.
Management’s efforts to revitalize the brand through store renovations and product initiatives are promising, yet the ongoing struggles of Jimmy Choo and pressures on wholesale revenue present obstacles. The company is also focusing on cleaning up its off-price channel, which could impact sales in the future. Additionally, while there are initiatives to improve gross margins, they are expected to remain under pressure due to tariffs and pricing adjustments. These mixed signals contribute to the Hold rating, as the potential for recovery is balanced by current and anticipated challenges.
According to TipRanks, Hutchinson is a 4-star analyst with an average return of 3.8% and a 51.94% success rate. Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Lululemon Athletica, Nike, and Ross Stores.
In another report released yesterday, Telsey Advisory also maintained a Hold rating on the stock with a $22.00 price target.