Michael Kors Holding Ltd. Beats Wall Street Expectations, Stock Soars
Buoyed by high performance of its retail, wholesale and licensing segments, Michael Kors Holdings Ltd. beat Wall Street expectations for fourth quarter earnings, the company announced Tuesday.
Total revenue rose 58 percent in the quarter, reaching $380 million, as revenue from stores open for at least a year rose by 36 percent, Marketwatch reported.
Sales figures from established stores are seen as a gauge of the fiscal health of the retailer as they exclude those that opened or closed within the last year. Michael Kors opened 71 stores last year, bringing its total to 237, Marketwatch reported.
The company’s earnings more than tripled earnings in its fiscal fourth quarter, with $43.6 million or 22 cents per share in the three months through March 31. The earnings figures for the same quarter last year were $13.6 million and 10 cents per share, respectively.
The increases came as the result of increasing demand for the company’s luxury clothing and accessories, CBS News reported. Michael Kors sells its products at its own stores and through retailers, and though it has luxury items up to $7,000, the bulk of sales were more affordable items like $600 purses.
The news came as a relief to many investors, especially in the luxury retail sales realm, CBS News reported. A warning last month from Tiffany & Co. has raised fears that Americans were spending less on purchases.
The sales increases for Michael Kors reflected, “strong demand for the Michael Kors luxury brand, our exciting assortment of fashion merchandise and our exceptional jet-set in-store experience,” the company’s CEO John Idol was quoted in Fox Business News.
Shares of the company’s stock, which went public in December, rose 12.34 percent to $42.89 ahead of the opening bell on Tuesday, Fox Business News reported. For the year the company’s stock is up 40 percent.
The company expects revenue of between $1.7 billion and $1.8 billion for the current year, along with earnings of between $1.08 and $1.12. Analysts polled by Thomson Reuters were not quite as optimistic, predicting earnings of 98 cents and $1.69 billion in revenue.