Kors’ same-store sales have fallen for five of the past six quarters.
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The results exceeded Wall Street expectations.
Total revenue rose slightly to $987.9 million, beating the average estimate of $953 million, as higher sales in Europe and Asia more than offset the impact of weakness in the Americas.
The Retail segment generated net sales of $562.9 million, up 7.6% year over year. Wholesales sales fell 7% while licensing revenue tumbled 21%. Currency impacts have almost disappeared from Kors’ results, costing it just a fifth of a percentage point on the revenue front.
Earnings are projected in the range of 84-88 cents per share for the fiscal first quarter.
Moving ahead, the retailer expects EPS to be $0.84-$0.88 on revenues of $1.07-$1.085 billion for the second quarter. Lastly, revenues in Asia soared 74.5% year over year to $73.1 million. However, the CEO pointed out that “this progress was muted by the continued decline in mall traffic trends, as well as a decrease in tourism in certain major cities, which negatively impacted our comparable-sales performance during the quarter”. Idol pointed to new digital flagships in Europe, as well as efforts to bolster its appeal to male customers.
Once again, however, Kors’ outlook tried to set the bar low for future financial performance.
Kors said it expected a mid single-digit percent decline in comparable sales in the current quarter. Operating margin contracted 630 bps year over year to 18.9% owing to a rise in operating expenses. That’s far less than the $1.13 per-share consensus forecast.
Michael Kors Holdings Limited ( KORS ), a global luxury lifestyle brand, reported that its net income attributable to MKHL for the fiscal 2017 first quarter ended July 2, 2016 declined to $147.1 million, or $0.83 per share, from $174.4 million or $0.87 per share in the first quarter of fiscal 2016.
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Kors shares were trading at $48 before the bell. For fiscal 2017, earnings per share are expected to be in the range of $4.56 to $4.64 on a non-GAAP basis, excluding the one-time costs, and $4.51 to $4.59 on a GAAP basis, including the one-time costs.
