Michael Kors Holdings Ltd. is reaping the rewards of a robust refresh of its core brand as well as its recent acquisition of Jimmy Choo.
The firm today reported a 6.5 percent rise in third-quarter revenues, to $1.44 billion, including a $115 million contribution from Jimmy Choo, which was in Kors’ stable for just two months during the period. Those results handily topped forecasts for revenues of $1.38 billion.
Overall, adjusted profits edged up 0.7 percent over the prior year to $273.4 million, or $1.77 per diluted share, blowing past analysts’ bets for earnings per diluted share of $1.29. On a reported basis, net income fell 19 percent year-over-year, to $219.4 million, or $1.42 per share.
Michael Kors chairman and CEO John Idol said the better-than-anticipated results were driven by higher revenue at both the Michael Kors brand Jimmy Choo as well as improved gross margin and lower expenses.
“Our solid financial performance reflects the continued progress we are making on our Runway 2020 strategic plan,” Idol added, referring to the firm’s long-term strategy to premiumize the Michael Kors brand.
“We continue to increase the level of fashion innovation and layering across our [Michael Kors’] assortments,” he added, noting that the firm has successfully completed the integration of Jimmy Choo.
Powered by the momentum of a significant third-quarter earnings beat, the company raised its full-year outlook and now expects total revenues of $4.66 billion, including between $225 million and $230 million of incremental revenue from Jimmy Choo. Comparable sales for the Michael Kors brand are expected to decline in the mid-single digits. Diluted earnings per share are forecast to be in the range of $4.40 to $4.45, with no incremental impact from Jimmy Choo.
As of 12:30 p.m. ET, the firm’s shares were up 3.6 percent to $67.76.