Capri Holdings Ltd

Luxury-brand owner (Versace/Jimmy Choo/Michael Kors) — declining, near-breakeven, with high leverage and negative equity.

Strengths

• Recognized luxury brands and high gross margin — gross margin 62%

Risks

• Declining revenue, near-breakeven — -4%, net income -112%
• High leverage / negative equity — D/E 4.3 (95th), ROE 171% artifact
• Post-failed-merger (Tapestry) turnaround risk — per 10-K

Notable findings

• High leverageHigh leverage (debt/equity 4.29)
• Exec changeRecent 8-K item 5.02 8-K ↗
• Insider buyingInsider buying — 1 open-market buy(s) by 1 insider(s) (~$988,900, last 6mo) Form 4 ↗
• Buying back stockNet buyback — share count -6%/yr over 4y
• Pending mergerTermination of the Agreement and Plan of Merger with Tapestry As previously disclosed, on August 10, 2023, Capri entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tapestry,
• Revenue declineRevenue -22.3% YoY
• Insider sellingInsider selling — 2 open-market sale(s) by 2 insider(s) (cluster of 2 insiders, ~$2M, last 6mo) Form 4 ↗