Debt-to-Equity Ratio

A company's debt-to-equity ratio compares its total liabilities to shareholders' equity, measuring how much it relies on borrowed money.

Capri Holdings currently has a ratio of 4.46x, which is far above the Consumer Cyclical sector median of 0.77x and places it in the 90th percentile among peers — indicating very high leverage relative to its industry. That said, the ratio has been decreasing over the last eight quarters, with a quarter-over-quarter drop of -74.9% from 17.75x to 4.46x; year-over-year change is not available. While the current level signals elevated financial risk from debt, the sharp downward trend suggests the company is actively reducing leverage, which could lower default risk over time. The combination of a still-high ratio and a rapidly improving trend presents a mixed picture: near-term caution is warranted, but the trajectory offers a potential opportunity if deleveraging continues. This metric supports the overall CAUTIOUS verdict, as the absolute level remains concerning despite recent progress.

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