Revenues for the firm, which many analysts had been down on in recent months, rose nearly 7 percent, or 12.3 percent on a constant-currency basis.
CEO John Idol said footwear experienced accelerated growth in the quarter, “though the warm weather tempered boot sales” — a trend that has shown up in earnings for footwear and apparel companies quite a bit this quarter.
“We are seeing accessories and footwear emerge as dominant e-commerce categories, demonstrating the brand strength of these core luxury product lines,” Idol said during the firm’s conference call. “We believe the transition to online and mobile purchasing will continue worldwide, and we are poised to capitalize on this shift with the development of our digital platform to provide a global, multi-language, multi-currency e-commerce experience for our customers.”
The company’s global comparable-store sales, however, decreased 8.5 percent, or 3.4 percent on a constant-currency basis. North American retail stores’ comps also declined by high single digits, while wholesale sales grew 8 percent in the quarter.
Net Income: Profits for the second quarter, ended Sept. 26, 2015, fell 6.7 percent, to $193.1 million, from the comparable quarter, when profits were $207 million.
EPS: Earnings per diluted share were down by a penny year-over-year, to $1.01. EPS were $1.07 on a constant-currency basis.
Net Revenue: Total revenue rose 6.9 percent, to $1.13 billion, from $1.06 billion in the second quarter of fiscal 2015. On a constant-currency basis, total revenue climbed 12.3 percent. Reported revenues were $1.09 billion.
Hit, Miss or Beat: Michael Kors beat Wall Street’s estimates for EPS and revenues. Analyst polled by Yahoo Finance had predicted EPS of 89 cents and revenues of $1.08 billion.
Executive Insights: “As we look to the second half of the year, we believe we are well-positioned for the upcoming holiday season. Michael and our design teams continued to create on-trend fashion products that embody the Michael Kors luxury brand. Our recent merchandise assortments reflect Michael’s leadership in driving the latest fashion trends.”
— Idol, during the Q2 conference call
Looking Ahead: Management lowered its guidance for the fiscal year. The company now expects total revenues to range from $4.6 billion to $4.65 billion, compared with the prior range of $4.7 billion to $4.8 billion. Reported comps are expected to decline by mid-single digits, compared with previous guidance of low-single-digit declines. Diluted EPS is now expected in the range of $4.38 to $4.42, versus the prior range of $4.40 to $4.50.