Executive Summary
In the fourth quarter of 2024, Capri Holdings Limited faced significant challenges, reflecting an overall net income loss of $472 million, translating to an EPS of -$4.03. This disappointing performance was attributed to a revenue decline of 8.39% year-over-year (YoY) and a more severe 14.30% decline sequentially. Management has acknowledged these struggles and signaled a strategic pivot aimed at adapting to shifting consumer preferences and enhancing brand loyalty. While the immediate outlook appears concerning, management remains optimistic about long-term brand repositioning and operational efficiencies as they navigate through an evolving luxury market.
The company’s operating income reflected substantial resilience with a remarkable YoY growth of 177.50%, suggesting appropriate cost controls amidst declining revenues. The focus now shifts to scalability and recovery of profitability in an industry marked by intense competition and changing consumer dynamics.
Key Performance Indicators
QoQ: -14.30% | YoY:-8.39%
QoQ: -23.17% | YoY:-16.90%
QoQ: -74.59% | YoY:177.50%
QoQ: -549.52% | YoY:-1 288.24%
QoQ: -547.78% | YoY:-1 339.29%
Key Insights
**Revenue:** $1.223 billion, down 8.39% YoY, down 14.30% QoQ
**Gross Profit:** $713 million with a gross profit margin of 58.3%, representing a significant decline from prior periods.
**Operating Income:** $31 million, a notable rebound of 177.50% YoY but down 74.59% QoQ.
**Net Income:** A loss of $472 million, with a net profit margin of -38.6%.
**Cash Flow:** Operating cash flow stood at approximately $43.68 million with free cash flow at -$6.16 million, painting a challenging liquidity ...
Financial Highlights
Revenue: $1.223 billion, down 8.39% YoY, down 14.30% QoQ
Gross Profit: $713 million with a gross profit margin of 58.3%, representing a significant decline from prior periods.
Operating Income: $31 million, a notable rebound of 177.50% YoY but down 74.59% QoQ.
Net Income: A loss of $472 million, with a net profit margin of -38.6%.
Cash Flow: Operating cash flow stood at approximately $43.68 million with free cash flow at -$6.16 million, painting a challenging liquidity picture.
Major fluctuations in performance metrics highlight operational adjustments to align with market demands, emphasizing a strategic focus for recovery.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.22B |
-8.39% |
-14.30% |
| Gross Profit |
713.00M |
-16.90% |
-23.17% |
| Operating Income |
31.00M |
177.50% |
-74.59% |
| Net Income |
-472.00M |
-1 288.24% |
-549.52% |
| EPS |
-4.03 |
-1 339.29% |
-547.78% |
Key Financial Ratios
operatingProfitMargin
2.53%
operatingCashFlowPerShare
$0.37
freeCashFlowPerShare
$-0.05
Management Commentary
Management Strategy:
- "We recognize that adapting to new consumer behaviors is paramount, and we are restructuring our marketing to reinforce brand loyalty while expanding our digital presence."
Operational Efficiency:
- "Despite the setbacks, our operating income growth year-over-year reflects our commitment to operational efficiencies, which we will continue to optimize as we move forward into the next fiscal year."
"We recognize that adapting to new consumer behaviors is paramount, and we are restructuring our marketing to reinforce brand loyalty while expanding our digital presence."
— John Idol, CEO
"Despite the setbacks, our operating income growth year-over-year reflects our commitment to operational efficiencies, which we will continue to optimize as we move forward into the next fiscal year."
— John Idol, CEO
Forward Guidance
Looking ahead, Capri Holdings anticipates a more stabilizing market. Management highlighted key focuses including driving brand engagement through digital marketing strategies and revamping product offerings to adapt to consumer tastes. Specific targets reflect aspirations of doubling the e-commerce contribution to sales over the next few quarters, a move expected to mitigate current challenges. Investors should closely monitor shifts in consumer engagement metrics as the company recalibrates its market approach.