Capri Enters August Earnings With Shorts Building and the Street Cutting Targets

CPRI heads into its August 5 earnings print with short sellers rebuilding positions, analysts trimming targets in near-unison, and the stock down 15% over the past month — a setup that makes the upcoming release the clearest near-term test of whether the turnaround narrative still holds.

Short interest has climbed meaningfully this month. It now accounts for 8.6% of the free float — up 6.2% over the past week alone, and up from around 6.5% in early July when shares changed hands above $19. The pace of that rebuild is notable: roughly 2.2 million additional shares have been added to the short book in the three weeks since early July's relative lull. Borrowing, however, remains cheap at 0.55% — a cost-to-borrow level that signals no friction for new shorts looking to press the position. Availability is loose at 1,123%, meaning there is no squeeze pressure; for every share currently borrowed, more than eleven sit available in the lending pool. Options positioning has drifted modestly more cautious than its recent norm — the put/call ratio is running at 0.50, roughly one standard deviation above its 20-day average of 0.46 — but remains well below the year's defensive peak of 0.89. The overall positioning picture is bears rebuilding with ease, not panic hedging from longs.

The Street has been cutting with unusual consistency this week. TD Cowen lowered its target to $20 from $26 on July 29, maintaining a Hold. Baird trimmed to $24 from $26 on July 27, keeping an Outperform. Barclays and Wells Fargo both cut targets earlier in the month. Across the recent changes, not a single firm upgraded its rating — every move was a target reduction while ratings held. The mean price target of $24.59 implies roughly 50% upside from current levels, but that gap has been narrowing steadily. The bull case rests on brand repositioning at Michael Kors showing early traction — improved full-price selling, higher average unit retail, positive comparable sales trends — and Versace as a longer-term margin driver. The bear case is harder to dismiss right now: revenue down 6% year-on-year, Michael Kors off 8%, a 5.4% operating margin that leaves little room for error, and tariff and foreign exchange headwinds still to work through. The EV/EBITDA multiple at 9.4x is low in absolute terms, and the PE at 6.9x reflects the market's scepticism rather than any implied value trap. The ORTEX short score sits at a neutral 48, while the 90-day EPS momentum factor ranks in the 92nd percentile — an unusual divergence between bottom-up estimate revision trends and the price action.

One institutional note worth flagging: Greenlight Capital held roughly 4.9 million shares as of March 31, making it the fifth-largest holder at 4.3% of shares outstanding. Greenlight added 162,000 shares in that quarter. Alongside it, Segall Bryant & Hamill added over 1.3 million shares in the period ending May 31. These are value-oriented managers building into weakness — a counterweight to the short-side positioning, though their latest data predates the most recent price decline.

The most recent earnings print, in late May, produced a one-day gain of 6.7% before giving back most of that move over the following five days — net flat after a week. The print before that dropped 6.8% on the day. In other words, CPRI has shown it can spike on results, but follow-through has been elusive. With shorts at a recent high, borrow cheap, and analysts having already reset targets ahead of August 5, the degree to which management can speak credibly to the pace of the Michael Kors brand recovery — rather than just the quarterly number — is what will determine whether this week's short rebuild unwinds or extends.