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TheStreet Open House

Michael Kors Bucks Retail Trend

Stocks in this article: KORSRLCOH

Coach's sales in China grew 60% during its recent fiscal fourth quarter; however, Deutsche Bank research analyst Dave Weiner expressed concern over Coach's correlation with the US economic environment and its limited brand recognition in Europe. Coach's North American sales for the quarter rose a marginal 1.7%.

Weiner lowered his Coach price target from $68 to $57.50, but maintained his "hold" rating.

Michael Kors' international brand recognition could be attributed to designer and company founder Michael Kors, who reached the masses as a judge on the Emmy-nominated reality television program Project Runway, starting in 2004. Set against this backdrop, the luxury retailer launched the fashion industry's largest U.S. public offering in December 2011, a deal which valued the company at $3.8 billion -- 45 times more than its earnings at the time.

In March of this year, Michael Kors sold 25 million shares of stock in a secondary offering at a price of $47 per share, to raise in excess of $1.7 billion.

The New York-based company expects to generate revenue between $490 million to $500 million in the second quarter of 2013, which assumes a comparable store sales increase of approximately 30%. Michael Kors also forecast earnings between 33 cents a share and 35 cents a share -- a bold outlook considering analysts surveyed by Thomson Reuters are only looking for 29 cents of earnings on $444.55 of revenue.

Michael Kors shares are up 13.67% to $48.14 on Tuesday and 76.66% year to date.

--Written by Nathalie Pierrepont in New York.

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