Sales for Michael Kors across the Americas, its largest market, were up by 4.6% to just over $879 million during its fourth quarter. On a constant currency basis, total revenue increased 11.7 percent.
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Analysts on average had expected a profit of 96 cents per share and revenue of $1.15 billion, according to Thomson Reuters I/B/E/S. Revenue is projected to be $50 million higher than the $1.1 billion posted in the same period a year earlier. The luxury lifestyle retailer’s fourth-quarter of fiscal 2016 earnings per share of 98 cents increased 8.9% year over year and also surpassed the Zacks Consensus Estimate of 96 cents. But for the full fiscal year, Kors thinks comps will fall by low-single-digit percentages, and adjusted earnings will be $4.56 to $4.64 per share. For fiscal 2015, the brand’s percentage of total revenue was slightly higher, at 60.6 percent.
The strong upward move by Michael Kors comes after luxury goods maker reported better than expected fourth quarter results.
“We once again saw a significant increase in conversion rates in our own retail stores as customers responded favorably to our new product offerings”, he said. We also continued to make strategic investments in our business that will pay meaningful dividends for years to come.
Pitney Bowes Inc.’s (PBI) EPS growth ratio for the past five years was 5.00% while Sales growth for the past five years was -7.40%.
Shortly after reporting earnings, the company announced that it has completed its acquisition of Michael Kors Ltd., the exclusive licensee of products in China and other jurisdictions in Asia, for $500 million in cash.
The Greater China business is expected to contribute approximately $200 million in retail net sales, reflecting sales for the 10 month period following the closing of the acquisition. The bullish plan KORS set in China is still unclear with the outcome. “As you know, we have worked diligently over the past several years, with our licensed partner in this region, to build the infrastructure, establish the brand and grow acceptance of Michael Kors in the Chinese market”, Mr. Idol said. “We believe that our brand is gaining strong momentum in Greater China, making it the ideal time for us to integrate this territory into our business and capitalize on the enormous growth potential in this region”. Michael Kors Holdings now has a consensus rating of “Hold” and a consensus target price of $54.73.
Michael Kors Holdings Ltd. shares are priced at 9.85x this year’s forecasted earnings, compared to the industry’s 6.48x earnings multiple.
The company forecast revenue in the first quarter of its fiscal 2017 year to be $940 million to $950 million, below expectations of $1.03 billion.
The company added that the guidance includes a planned reduction in the wholesale shipments.
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Michael Kors has refreshed its product lines much faster, managing very tightly its distribution at the wholesale level to keep the exclusivity in its products while pushing into retailing online to give a boost to its growth in sales.
