Michael Kors Earnings: Here’s Why Investors are Bidding Up Shares

Michael Kors Holdings (NYSE:KORS) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 3%.

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Michael Kors Holdings Earnings Cheat Sheet

Results: Net income increased to $97.8 million (49 cents per diluted share) in the quarter versus a net gain of $31.6 million in the year-earlier quarter.

Revenue: Increased 74.4 percent to $532.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations

Michael Kors Holdings reported adjusted net income of 49 cents per share. By that measure, the company beat the mean analyst estimate of $0.40. It beat the average revenue estimate of $519.31 million.

Quoting Management

John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “Michael Kors delivered another outstanding quarter with exceptional sales growth across our business segments and geographies. Our North America comparable store sales growth of 45.1% demonstrates the strong demand forMichael Kors products as we continue to offer a compelling assortment of luxury merchandise and exceptional service in a jet set store environment. The net sales growth of 76% in our North America wholesale segment reflects the continued successful conversion to shop-in-shops in department stores as well as exceptional comparable store sales. We continue to gain brand acceptance in Europe as evidenced by the 97% sales growth we achieved in this region. Finally, in our licensing segment, we achieved 13% growth, which was driven primarily by ongoing strength in watches. We remain very excited about the long term growth prospects for our company as a global luxury lifestyle brand.”

Key Stats

Revenue increased 28.45% from $414.87 million in the previous quarter. Net income increased 42.46% from $68.65 million in the previous quarter.

Outlook

For the third quarter of fiscal 2013, the Company expects total revenue to be in the range of $525 million to $535 million. This assumes a mid-twenty percent comparable store sales increase. Diluted earnings per share are expected to be in the range of$0.37 to $0.39 for the third quarter of fiscal 2013. This assumes 202 million diluted weighted average shares outstanding and a 38% tax rate.

For fiscal 2013, the Company now expects total revenue to be in the range of $1.86 billion to $1.96 billion. This assumes a comparable store sales increase of approximately 30%. Diluted earnings per share are now expected to be in the range of$1.48 to $1.50 for fiscal 2013. This assumes 201.2 million diluted weighted average shares outstanding and a 38% tax rate.

Analysts Looking Forward

Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.34 to a profit $0.39. For the current year, the average estimate has moved up from a profit of $1.2o to a profit of $1.46 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)

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