CPRI reports fiscal Q4 results today carrying a story that is less about brand momentum and more about whether the numbers can justify holding a heavily indebted luxury portfolio at a depressed valuation.
The positioning heading into today's print is notably unbothered. Short interest has been trending steadily lower — down roughly 11% from a month ago to 9.2% of the free float — suggesting shorts are quietly covering rather than building into the release. The lending market backs that up: availability is extraordinarily loose at around 1,458% of short interest, meaning shares to borrow are plentiful with no squeeze pressure whatsoever. Cost to borrow is a negligible 0.44%. Options are similarly uncrowded on the bearish side — the put/call ratio is near its 52-week low at 0.15, barely moving from its 20-day average and a fraction of the 0.89 it reached at its annual peak. Bulls and bears alike appear to be sitting on their hands.
The CEO has been buying. John Idol picked up 55,000 shares in March at $17.98 — just below the current price of $18.50 — for roughly $989,000. That is the most meaningful insider action in recent months, and it arrived when the stock was trading near multi-year lows. It does not flip the balance sheet, but it is a notable signal of conviction from the top.
The balance sheet is what the debate circles back to. Net debt has climbed to $2.59 billion against quarterly EBITDA of just $47 million — a leverage ratio that leaves very little room for error. Revenue contracted 6% year-on-year in the prior quarter, operating cash flow went negative, and the EV/EBITDA multiple is stretched well above 60x on a last-twelve-months basis. The sale of Versace removed a key asset while injecting liquidity for debt reduction; bulls point to the cleaner two-brand focus on Michael Kors and Jimmy Choo, plus accessory lines showing some early traction, as the foundation for a leaner recovery. Bears flag twelve consecutive quarters of Michael Kors declines, rising tariff headwinds, and margin compression that has eroded the case for a premium multiple. Analyst sentiment is split. JP Morgan maintained Overweight with a $31 target in mid-April, while Barclays cut its target from $32 to $24 around the same time, and Goldman Sachs and Wells Fargo moved to more cautious stances in early February after the prior print.
Correlated peers RL and PVH both rallied sharply over the past week — 15.6% and 11.9% respectively — while CPRI added only 8.2%, suggesting the sector has recovered some ground but the market is less willing to extend that benefit to the most leveraged name in the group. Today's print is ultimately a test of whether the brand restructuring and debt trajectory are moving fast enough to keep investors patient.
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