High-end apparel companies rose early Tuesday, supported by rising investor optimism about a recovery from the coronavirus pandemic.
This is where things stand for the shares of these three companies at 10:00 EDT, relative to their closing prices on Monday:
- Capri Holdings (NYSE: CPRI) up 30.4%.
- Ralph Lauren (NYSE: RL) up 10.9%.
- Tapestry (NYSE: TPR) up 11%.
All three companies have been hit hard in recent weeks by events related to the COVID-19 outbreaks in North America and Europe. All have closed their factory-owned shops in these areas and all continue to deal with difficult suppliers.
But all three rebounded on Tuesday morning consumer discretionary stock investors grew more optimistic about the post-coronavirus economy after some encouraging data points emerged over the weekend and on Monday. Among them: The more evidence consumers have – at least affluent consumers targeted by this company brand keep shopping online when taking shelter at home.
The following are the latest developments for each.
- Capri Holdings, the parent company of the Michael Kors, Jimmy Choo, and Versace brands, said on Monday that it will invest around 7,000 North American retail employees from April 11 until stores reopen, which is expected after June 1. (Furloughed employees will not receive payments, but will continue to benefit.) It also cuts executive pay, and has withdrawn the remaining $ 300 million from its credit line. As of April 1, he had about $ 900 million in cash, he said. Capri bond rating is cut to BB + by Fitch Holdings on April 2nd.
- Ralph Lauren also said on Monday that they would leave store employees in North America on April 11 while continuing to provide benefits, and also cut executive pay. (Ralph Lauren himself, chief executive of the company, will release the fiscal year 2020 bonus and all his salary for fiscal year 2021. The company is currently in the fourth quarter of its 2020 fiscal year.) The company noted that most of its retail stores in China and South Korea are now has reopened, and a fulfillment center that supports its online store reopened on April 1.
Ralph Lauren’s stores in North America and Europe will remain closed indefinitely, the company said. Image source: Ralph Lauren.
- Tapestry, the parent company of the Coach brand, Stuart Weitzman, and Kate Spade, has not yet announced leave for retail store employees that are closed on Tuesday morning. But in his latest update, on March 26, he said that the store will remain closed until at least April 10th, and that employees will continue to receive payments and benefits until that date. Distribution centers that support online stores remain open. Tapestry has also suspended its dividend and share repurchase program to date, and has withdrawn $ 700 million from a total of $ 900 million from existing credit lines.
The three companies so far have done a good job of keeping investors informed of developments as they face the current crisis. All three are expected to report earnings next month: Capri Holdings usually reports fourth quarter results and full fiscal year at the end of May, Ralph Lauren generally reports fourth quarter results and full fiscal year in mid-May, and Permadani usually reports third-quarter fiscal results in early May.
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