伯恩斯坦零售论坛Capri公司要点

Aneesha Sherman+1 917 344 8457aneesha.sherman@bernsteinsg.com Jessica Tian+1 917 344 8413jessica.tian@bernsteinsg.com RatingMarket-Perform Jed Hodulik+1 917 344 8594jed.hodulik@bernsteinsg.com Price Target CPRI 24.00 USD Capri: Key takeaways from Bernstein's Retail Forum Yesterday, we hosted Capri Chairman and CEO John Idol, COO/CFO Tyler Reddien, andInvestor Relations at Bernstein’s 2ndAnnual Retail Forum, for a fireside chat and investormeetings. We recap the key points from the discussions. Michael Kors is still in early innings of a long-term brand repositioning. Full-pricetrends are already positive, thanks to strategic initiatives over 18 months to improve price-value, elevate the brand through better storytelling and marketing, enhance store experience,rationalize SKUs and reduce discounting. Outlet trends are expected to inflect this fall/wintermainly through improved “quality of sales” i.e. less discounting, bulk wholesale selling, andOff-price selling. Mgmt expects growth in H2 onward, which should drive operating leverageand steady margin improvement, back to low-20s margins on a $4b business. Jimmy Choo is growing and seeing strong momentum, with profitability to return thisyear. New product launches, stronger marketing, and a broadening of the assortment (e.g.sneakers, loafers, jelly flats, handbags) are driving strong brand resonance. Growth shoulddrive profitability, and Mgmt expects positive margins in FY27 and eventually LDD% withplenty of further upside from cost initiatives. N. America consumer is healthy, Europe more challenged. Europe trends havedecelerated slightly more than expected, which Mgmt attributes to a decline in inboundtourism from the Middle East, driving some caution in outlook (but no changes to Q1 guide).N. America consumer is more “choiceful” but willing to spend if product is compelling, andChina remains a strong opportunity for growth for both brands. Investment Implications $24 price target with a 10x P/E multiple on FY28 EPS estimate of $2.50. DETAILS KEY TAKEAWAYS FROM CAPRI MANAGEMENT We hosted a fireside chat with John Idol, Chairman and Chief Executive Officer and Tyler Reddien, Chief Operating Officer/ChiefFinancial Officer, as well as meetings with CEO, CFO/COO and IR, at our Retail Forum yesterday. We recap the key takeaways below. Bernstein clients are welcome to reach out to us for more detailed takeaways and/or adiscussion of our views on Capri. OUTLOOK ON THE SECTOR AND CONSUMER •The luxury sector has decelerated to flat / declining growth, but there is still opportunity for winners. Today’s flatto LSD declining sector growth is a clear step down from the historical MSD growth. Mgmt noted that “the luxury industryhas moved too far too fast” in terms of price increases among many European luxury brands, leading to price fatigue amongconsumers, resulting in share losses in the “higher luxury segments.” That being said, brands that have strong product anda compelling story can still win and gain share. Even though the sector may take some time to return to growth, there’s clearopportunity for winners and Mgmt sees Capri as a clear share gainer over the mid-term. •North America consumer trends are healthy though the consumer is being “choiceful"and more thoughtful in whatthey purchase. Capri is “optimistic” about the N. American consumer, noting that as long as there is compelling product andsomething that’s “exciting” in design, fashion and quality, the brands can see growth in today’s environment. •Europe is facing challenges and Mgmt is seeing a deceleration this quarter. Up until the last couple of months, thetrends were “steady” but recently, travelers from the Middle East specifically are no longer coming into the region, whichis hurting sales in Europe — this is a “substantial” business for both Jimmy Choo and Michael Kors, which is driving somecaution in their view of the European business. As far as the impact to numbers, Mgmt emphasized that there are no changesto guidance for Q1, however their view is currently “cautious” on how the market is faring overall. •Optimistic about growth in Asia, especially Chinawhere Mgmt sees a big opportunity for growth and share gain,supported by an emerging trend of consumers favoring accessible luxury brands over super-high luxury. Japan and Korea,both historically strong markets for the company, remain solid and have more opportunity for growth as well. MICHAEL KORS •Still early innings of a long-term repositioning of the brand. Mgmt is 18 months into a multi-year effort to revitalize andreposition the Kors brand — key initiatives included creating a better price-value offer to the customer, elevating the brandthrough better storytelling and stronger marketing messages, enhancing the in-store experience through targeted storerenovations, rationalizing the SKU mix to focus on icons (e.g. Nolita, Hamilton, Laila) rather than lower-performing products,improving the quality and fashion of the O