Homepage / Investment / Michael Kors' profit tumbles but tops Street estimates, sending shares soaring
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election


Michael Kors' profit tumbles but tops Street estimates, sending shares soaring

In the wake of announcing a major acquisition, stronger comparable sales results in North America and Europe helped fuel Michael Kors‘ profit and revenue to top Street expectations in its fiscal first quarter.

Michael Kors said Tuesday that its net income attributable to the company dropped 15 percent to $125.5 million, or 80 cents per share, from $147.1 million, or 83 cents a share, a year ago. Last year’s figure included one-time costs related to the acquisition of a Greater China licensee. Excluding that charge, Kors had earned 90 cents a share.

While its profits fell, Tuesday’s results outpaced both the company’s and analysts’ expectations. According to Thomson Reuters, analysts on average were predicting Kors would earn 62 cents per share. That was also the midpoint of the company’s own forecast range.

“The numbers are something of a step forward,” GlobalData Retail Managing Director Neil Saunders wrote in an email to clients.

“While the numbers may strengthen [from here], the rest of this fiscal year will essentially be one of rebuilding and refining the brand, as well as closing further excess capacity and investing in channels and stores that have the best forward potential.”

Total revenue for the first quarter came in at $952.4 million, again topping analysts’ estimates for sales of $918.6 million, according to Thomson Reuters. But this was another drop — by 3.6 percent — from last year.

The drop in revenue wasn’t a surprise, Saunders added, but it’s more of a “necessary evil” as Kors gets out of retailers that no longer fit the brand’s fresh strategy. “Reducing ubiquity comes with a price attached.”

Michael Kors’ same-store sales dropped 5.9 percent during the period, coming in better than expected. Analysts surveyed by FactSet had predicted a decline of 9 percent.

Shares of Michael Kors climbed more than 14 percent higher on the news in premarket hours.

“This trend of beating expectations is likely to continue as the top line appears on a path of improvement from here,” Jefferies analyst Randal Konik wrote in a note to clients, saying the “turn [is] taking place.”

Investors appear to be rallying behind the fashion company as it shows early signs that its turnaround efforts are paying off sooner rather than later. Michael Kors raised its sales outlook for the full year.

“We are encouraged by our first quarter performance, although we continue to believe that fiscal 2018 will be a transition year for our company, as we focus on laying the foundation for the future by executing on our strategic plan,” CEO John Idol said in a statement, reiterating his goals of returning to profit growth.

“In addition, we are pleased to have recently announced plans to form a global fashion luxury group,” Idol added.

Earlier this summer, Michael Kors revealed plans to buy London-based shoemaker Jimmy Choo in a deal valued at $1.2 billion.

“This will not be [Michael Kors’] last acquisition,” CEO Idol told CNBC in a phone interview shortly after the acquisition was announced.

Idol has reiterated time and again that Michael Kors is focused on forming a “luxury group.” On Tuesday, he added that a more diverse portfolio will play well as the retailer looks to increase exposure in international markets.

Meantime, Michael Kors has seen its same-store sales drop in recent quarters, with fewer shoppers flocking to brick-and-mortar department stores to ring up big purchases. Additionally, the retailer’s core handbag business has slowed, with competitors rolling out heavier discounts and promotions, enticing women to shop for bargains.

Pressure really hit the retailer in May, when rival Coach agreed to buy Kate Spade in a deal valued at $2.4 billion.

On Tuesday, Michael Kors said that its outlook for the full year doesn’t include any expectations related to acquiring Jimmy Choo, as the deal between the two has yet to be completed. Once finalized, incremental revenue is expected to be about $275 million for the second half of fiscal 2018. And in fiscal 2019, Michael Kors said it expects incremental revenues of $570 million to $580 million.

Not including results from Jimmy Choo, the handbag maker has raised its annual revenue forecast, putting total sales estimates at about $4.28 billion and calling for comparable sales to only decrease in the mid-single digits range. It previously expected sales of $4.25 billion.

“Management guided to both better top and bottom-line metrics for next quarter and the fiscal year, which is key as the market has been afraid of more guidance cuts,” Konik said. “That’s simply not happening.”

Konik added that the “strategic direction is positive” for Kors from here on out.

As of Monday’s close, Michael Kors’ stock has dropped about 26 percent over the past 12 months, and shares are down near 13 percent in 2017. In recent weeks, the stock has made somewhat of a comeback, inching up 3.3 percent over the past month.

Source: FactSet

Source: Investment Cnbc
Michael Kors' profit tumbles but tops Street estimates, sending shares soaring

Comments are closed.