Michael Kors Holdings Ltd. may have reinvigorated hope in the faltering handbag category, posting a robust finish to the first quarter with revenue gains along with a Street beat. Profits, however, slid for the second consecutive quarter, down more than 7 percent year-over-year this time.
Michael Kors’ CEO John Idol said the better-than-expected results were driven by stronger performance in both retail and wholesale segments. The increase in retail net sales was attributable to new stores and accelerated growth in the North American digital flagships, which experienced 102 percent year-over-year increase, Idol added.
The company’s shares were up 13 percent in early-morning trading.
Net Income: Net earnings for the first quarter ended June 27, 2015, declined 7 percent to $174 million compared to earnings of $187 million in the comparable quarter.
EPS: Earnings per diluted share slid 4 cents to 87 cents compared to diluted EPS of 91 cents in the same year-ago quarter.
Net Revenue: Total revenue increased 7.3 percent to $986 million from $919.2 million in the first quarter of fiscal 2015. On a constant-currency basis, total revenue increased 13.4 percent.
Hit, Miss or Beat: Kors beat Wall Street’s estimates for EPS and revenues in Q1. Analysts polled by Yahoo Finance had predicted EPS of 75 cents per share and revenues of $944 million.
Executive Insights: “For spring 2016, we are introducing our largest assortment of new handbag groups as well as new watch styles that represent the most extensive presentation of innovative and new materials we have introduced to date. It’s all about fashion, and we remain focused on offering our customers compelling on-trend product each season. Overall, our brand remains strong, driven by a powerful business model. We are focused on driving our direct-to-consumer business both through our digital flagships and our retail stores and building our wholesale presence through shop-in-shops. Our growth is rooted in our design leadership, and we will continue to expand our fashion offerings and deliver exceptional luxury products across all lifestyle categories.” –Idol, during Q1 conference call.