2023-07-31 07:39:18 ET
JPMorgan downgraded Capri Holdings Limited ( NYSE: CPRI ) to a Neutral rating from Overweight on Monday.
Analyst Matthew Boss and team see the apparel manufacturer's revenue and profit profile as outlined at the July Analyst Day event as a "show-me" story on execution.
The analysts also pointed to increased risk to pricing power and AUR gains relative to pre-pandemic, with signs of consumer pushback being observed within U.S. wholesale. "Lastly, while CPRI has shifted to a greater Direct to Consumer sales mix driving greater full-price selling, the shift comes with an increased operating expense burden, with management citing little low hanging fruit remaining with SG&A to cut in a slowing topline backdrop," warned the firm.
Both the Michael Kors and Versace businesses are seen as at risk of soft sales growth in the current environment due to worsening Google search trends and broad macro pressures.
JPMorgan set a price target of $47 on Capri Holdings ( CPRI ).
Shares of Capri Holdings ( CPRI ) fell 2.48% premarket to $36.15.
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Capri Holdings falls after JPMorgan pulls bull rating due to soft trends at Michael Kors, Versace softness