Bloomberg News

Michael Kors Gains on Raising Full-Year Profit Forecast

February 12, 2013

Michael Kors Holdings Ltd (KORS:US)., named for the designer who founded the company, rose to the highest price since its market debut after forecasting profit for fiscal 2013 more than double that reported a year earlier.

The shares (KORS:US) climbed 8.8 percent to $62 at the close in New York, for the highest price since Dec. 15, 2011. The Hong Kong- based company has gained 85 percent in the past 12 months, while the Standard & Poor’s 500 Consumer Discretionary Sector Index has risen 20 percent.

Sales growth at Michael Kors has outpaced competitors, including Coach Inc. (COH:US), as it focuses on selling accessories. Revenue rose 70 percent in the three months ended Dec. 29, fueled by the company’s so-called jet-set line, which includes handbags, wallets and watches, according to a statement today. Fiscal 2013 sales will jump 62 percent, the company said today.

“Growing brand awareness” supports rapid revenue growth for Michael Kors, Erika Maschmeyer, an analyst at Robert W. Baird & Co., said in a research note dated Feb. 11. She rates the shares outperform, meaning they’re expected to do better than the broader U.S. equity market.

Profit (KORS:US) excluding certain items will be as much as $1.82 a share in fiscal 2013, compared with a previous estimate of as much as $1.50, according to the statement. Analysts estimated $1.57 a share, according to the average of 14 projections compiled by Bloomberg. Profit excluding expenses related to its initial public offering and other charges was 86 cents a share in the year ended March 31, 2012.

Store Sales

Revenue for the current fiscal year may be about $2.1 billion, the company said today. Michael Kors reported sales of $1.3 billion a year earlier and previously estimated revenue of as much as $1.96 billion for the current annual period. Analysts (KORS:US) estimated $2.01 billion, on average.

Third-quarter revenue rose to $636.8 million from $373.6 million a year earlier, according to the statement.

Michael Kors, which has 388 retail stores worldwide, said its 2013 revenue forecast assumes a “mid-thirty percent” increase in comparable-store sales, compared with a previous estimate for 30 percent growth. Same-store sales rose 39 percent in the company’s fiscal 2012.

Comparable, or same-store sales are considered an indicator of a company’s growth because they include only older stores.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • KORS
    (Michael Kors Holdings Ltd)
    • $74.29 USD
    • -1.36
    • -1.83%
  • COH
    (Coach Inc)
    • $36.43 USD
    • 0.68
    • 1.87%
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