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Reuters
Published
Feb 12, 2013
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Michael Kors profit soars on strong demand

By
Reuters
Published
Feb 12, 2013

Fashion company Michael Kors handily beat Wall Street's estimates for its third-quarter results and raised its full-year outlook, boosted by strong sales of its luxury items in North America and Europe during the holiday season.


Michael Kors Spring-Summer 2013/2014 (photo: Michael Kors)

The results sent the company's shares up 11 percent in premarket trade on Tuesday.

Revenue jumped 70 percent to $636.8 million in the quarter ended December, well ahead of the $540.3 million analysts had anticipated.

Kors, known for its designer wear, handbags and watches, raised its full-year earnings-per-share estimate to between $1.80 and $1.82 from a range of $1.48 to $1.50.

It now sees full-year revenue at about $2.1 billion, against the $1.86 billion to $1.96 billion forecast earlier.

Analysts had estimated full-year earnings of $1.57 per share on revenue of $2.01 billion, according to Thomson Reuters I/B/E/S.

Comparable-store sales in the third quarter rose 41 percent in North America, while those in Europe rose 58 percent.

Last month, rival Coach said comparable-store sales in North America fell 2 percent in the holiday quarter, indicating, according to some, that Kors is gaining market share.

Sales at its wholesale division rose 75 percent in North America to $573.1 million, helped by higher same-store sales and increased conversion of wholesale department stores into branded shop in shops, John Idol, chief executive officer said.

Net income rose four fold to $130.0 million, or 64 cents per share, up from $32.0 million, or 20 cents per share, a year earlier. Analysts had expected 41 cents per share.

Kors shares closed at $57.00 on the New York Stock Exchange on Monday.

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