Traders Buying Michael Kors (KORS) Shares Amid Strong Q3 Report, FY12 Guidance
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Shares of Michael Kors Holdings Limited (NYSE: KORS) have just opened Tuesday's session nearly 20 percent higher following a solid third-quarter earnings report and FY12 guidance which looks strong. This was the retailer's first quarterly report as a public company.
Revenue increased 67.9 percent from the same quarter last year to $373.6 million and topped the Street’s consensus of $349.2 million. Retail net sales increased 82.8 percent to $199.4 million, driven by 75 new store openings since the end of the third quarter of last year and a 38 percent increase in comparable stores sales.
Gross profit rose 75.1 percent to $221.9 million and totaled 59.4 percent of total sales, up from 57 percent in the third quarter of fiscal 2011.
Operating income totaled 17.3 percent of total revenue and grew 43.7 percent to $64.6 million on a year over year basis.
Net income was $39.0 million, or $0.20 per diluted share. Excluding the aforementioned equity compensation charge and IPO-related expenses, net income was $53.6 million, or $0.28 per diluted share. This compares to $27.8 million, or $0.16 per diluted share in the third quarter of fiscal 2011. The Street’s consensus was calling for earnings of just $0.09 per share.
John Idol, the Company’s Chairman and CEO, commented, “We are pleased with our third quarter sales and earnings growth. Our results were driven by strong performance across each of our retail, wholesale and licensing segments. Our North American comparable store sales growth was 38.0% over the third quarter of last year. These results reflect the strong demand for the Michael Kors luxury brand, our exciting assortment of fashion merchandise and our exceptional jet-set in-store experience. Along with sustaining strong comparable store sales results in North America, we also delivered significant growth in our wholesale segment. In Europe, revenues tripled in the third quarter as a result of a 34.4% comparable store sales increase over last year, in addition to strong performance in the wholesale operations. In Japan, we are cautiously encouraged by our results for this business which is in the start-up phase. Licensing revenue grew 44.0% due to strong sales of our products during the holiday season led by the Michael Kors watch line. We are uniquely positioned to continue to build our global, luxury lifestyle brand and we have tremendous opportunity for growth.”
For the fourth quarter of fiscal 2012, Michael Kors expects total revenue to be in the range of $350 million to $355 million, above the Street’s consensus of $349.2 million. Diluted earnings per share are expected to be in the range of $0.10 to $0.12 for the quarter, inline with the Street’s consensus of $0.11. This assumes 197.0 million diluted weighted-average shares outstanding and a 40 percent tax rate.
For fiscal 2012, the company expects total revenue to be in the range of $1.27 billion to $1.28 billion, slightly above the Street’s consensus of $1.25 billion. Excluding the effect of the aforementioned one-time charges, which impacted diluted earnings per share by $0.09, diluted earnings per share are expected to be in the range of $0.74 to $0.76 for the year. This assumes 190.0 million diluted weighted-average shares outstanding and a 40 percent tax rate.
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Revenue increased 67.9 percent from the same quarter last year to $373.6 million and topped the Street’s consensus of $349.2 million. Retail net sales increased 82.8 percent to $199.4 million, driven by 75 new store openings since the end of the third quarter of last year and a 38 percent increase in comparable stores sales.
Gross profit rose 75.1 percent to $221.9 million and totaled 59.4 percent of total sales, up from 57 percent in the third quarter of fiscal 2011.
Operating income totaled 17.3 percent of total revenue and grew 43.7 percent to $64.6 million on a year over year basis.
Net income was $39.0 million, or $0.20 per diluted share. Excluding the aforementioned equity compensation charge and IPO-related expenses, net income was $53.6 million, or $0.28 per diluted share. This compares to $27.8 million, or $0.16 per diluted share in the third quarter of fiscal 2011. The Street’s consensus was calling for earnings of just $0.09 per share.
John Idol, the Company’s Chairman and CEO, commented, “We are pleased with our third quarter sales and earnings growth. Our results were driven by strong performance across each of our retail, wholesale and licensing segments. Our North American comparable store sales growth was 38.0% over the third quarter of last year. These results reflect the strong demand for the Michael Kors luxury brand, our exciting assortment of fashion merchandise and our exceptional jet-set in-store experience. Along with sustaining strong comparable store sales results in North America, we also delivered significant growth in our wholesale segment. In Europe, revenues tripled in the third quarter as a result of a 34.4% comparable store sales increase over last year, in addition to strong performance in the wholesale operations. In Japan, we are cautiously encouraged by our results for this business which is in the start-up phase. Licensing revenue grew 44.0% due to strong sales of our products during the holiday season led by the Michael Kors watch line. We are uniquely positioned to continue to build our global, luxury lifestyle brand and we have tremendous opportunity for growth.”
For the fourth quarter of fiscal 2012, Michael Kors expects total revenue to be in the range of $350 million to $355 million, above the Street’s consensus of $349.2 million. Diluted earnings per share are expected to be in the range of $0.10 to $0.12 for the quarter, inline with the Street’s consensus of $0.11. This assumes 197.0 million diluted weighted-average shares outstanding and a 40 percent tax rate.
For fiscal 2012, the company expects total revenue to be in the range of $1.27 billion to $1.28 billion, slightly above the Street’s consensus of $1.25 billion. Excluding the effect of the aforementioned one-time charges, which impacted diluted earnings per share by $0.09, diluted earnings per share are expected to be in the range of $0.74 to $0.76 for the year. This assumes 190.0 million diluted weighted-average shares outstanding and a 40 percent tax rate.
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