While many companies are threatened with supply-chain issues, logistical bottlenecks, and inventory delays – Capri Holdings (NYSE: CRPI) has waved off any potential challenges, sending the stock soaring 12% at the opening of Wednesday’s market.
Headwinds have been a critical adversity throughout the post-Covid industry – we are seeing analyst downgrades represent supply and transportation struggles across the board, but it seems the luxury goods sector is biting back.
Picking up speed from pandemic stagnancy, the luxury goods industry is surviving thanks to a stable current of demand for their products, which include high-end brands such as Michael Kors, Jimmy Choo, and Versace.
Dealing with higher transportation and freight costs, Capri Holding have ensured financial stability by inflating prices across stores –
Capri CEO John Idol mentioned:
“The success of these (strategic) initiatives is currently offsetting the COVID-19 related industry headwinds including supply chain delays and increased transportation costs”
So, in a rogue fashion, Capri surprises analysts and defies wider economic hallmarks; announcing a new $1 billion share buyback program and a 17% jump in Q2 revenue.
Capri has also issued a bold 2022 fiscal forecast – estimating earnings per share of roughly $5.30, a substantial increase from the previous forecast of $4.50.
Clearly, Capri has successfully adapted to the headwinds that are stumping growth across the inventory-based industry. Increasing the already impressive margin on high-end goods has given Capri some much-needed breathing space as luxury shoppers return to pre-Covid spending habits. Other companies haven't been so successful, with Chill Brands halting a product roll-out due to supply issues.
Surging past the $60.00 level, CPRI stock is showing daily gains of 12.4% in the early hours of Wednesday trading. With amendments to their profit forecast and boasting strong quarterly revenue, CPRI might be a welcomed stock to watch in a landscape of headwinds.
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