Michael Kors Holdings Ltd. (NYSE: KORS) reported its fiscal third-quarter financial results before the markets opened on Tuesday. The company said that it had $1.64 in earnings per share (EPS) and $1.35 billion in revenue, versus consensus estimates from Thomson Reuters of $1.63 in EPS on revenue of $1.36 billion. In the same period of last year, Michael Kors posted EPS of $1.59 and $1.4 billion in revenue.
Retail net sales increased 9.2% to $836.7 million, driven primarily by 193 net new store openings since the end of the third quarter of fiscal 2016. On a constant currency basis, retail net sales increased 10.0% and comparable sales decreased 6.4%. Wholesale net sales decreased 17.8% to $473.1 million and on a constant currency basis, while wholesale net sales decreased 17.5%. Licensing revenue decreased 22.9% to $43.0 million.
At the end of the quarter, Michael Kors operated 816 stores, including concessions, up from 623 retail stores, including concessions, at the end of the same period of last year.
In terms of guidance for the fiscal fourth quarter, the company expects to see EPS in the range of $0.68 to $0.72 and revenues between $1.035 billion and $1.055 billion. The consensus estimates are $0.93 in EPS and $1.11 billion in revenue.
On the books, Michael Kors cash and cash equivalents totaled $368.8 million at the end of the quarter, down from $696.8 million at the end of the same period of last year.
John D. Idol, board chair and chief executive of Michael Kors, commented:
During the quarter, we delivered earnings per share results that were in line with our expectations and we continued to focus on our growth pillars, which are centered on consistently delivering innovative fashion products for our customers and enhancing consumer engagement with the Michael Kors brand worldwide. … Overall, we were disappointed with our North American and European comparable store sales performance during the quarter. We believe that headwinds in these markets will continue throughout the Spring season as we face reduced traffic trends in shopping malls, currency fluctuation, uncertainty surrounding certain political changes in European countries and the implementation of our reduced promotional cadence in North America. While we face certain challenges in the short term, we continue to believe that there is meaningful long-term growth ahead for the company as we focus on maintaining our luxury leadership position while expanding the Michael Kors brand internationally.
Shares of Michael Kors closed Monday at $41.28, with a consensus analyst price target of $50.42 and a 52-week trading range of $40.36 to $59.49. Following the release of the earnings report, the stock was down nearly 10% at $37.37 in early trading indications Tuesday.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
