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Michael Kors Holdings Limited Announces Second Quarter Fiscal 2013 Results

Stocks in this article: KORS

Michael Kors Holdings Limited (NYSE:KORS) (the “Company”), a global luxury lifestyle brand with a multi-channel strategy, unique design and strong infrastructure, today announced its financial results for the second quarter ended September 29, 2012.

John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “We were pleased to have delivered record results in the second quarter. Our performance is a reflection of Michael Kors’ brand strength, innovative fashion design and the successful execution of our growth strategies. We are excited to see the growing global recognition and appeal for the Michael Kors luxury brand.”

For the second quarter ended September 29, 2012:

  • Total revenue increased 74% to $532.9 million from $305.5 million in the second quarter of fiscal 2012.
  • Retail net sales increased 82% to $242.3 million driven by a 45.1% increase in comparable store sales and 66 new store openings since the end of the second quarter last year. Wholesale net sales increased 75% to $270.8 million and licensing revenue increased 13% to $19.9 million.
  • Gross profit increased 80% to $315.9 million, and as a percentage of total revenue increased to 59.3% compared to 57.3% in the second quarter of fiscal 2012.
  • Income from operations was $157.9 million and as a percentage of total revenue was 29.6%. For the second quarter of fiscal 2012, income from operations was $59.3 million and included a $10.7 million charge related to the employee share option redemption associated with our private placement. Excluding this amount, income from operations was $70.0 million, or 22.9% as a percentage of total revenue.
  • Net income was $97.8 million, or $0.49 per diluted share, based on 200.2 million weighted average diluted shares outstanding. Net income for the second quarter of fiscal 2012 was $40.6 million, or $0.22 per diluted share, based on 187.6 million weighted average diluted shares outstanding. Excluding the aforementioned charge, net income for the second quarter of fiscal 2012 was $47.5 million, or $0.25 per diluted share.
  • At September 29, 2012, the Company operated 269 retail stores, including concessions, compared to 203 retail stores, including concessions, at the end of the same prior-year period. The Company had 80 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 349 Michael Kors stores worldwide at the end of the second quarter.

Mr. Idol continued, “Michael Kors delivered another outstanding quarter with exceptional sales growth across our business segments and geographies. Our North America comparable store sales growth of 45.1% demonstrates the strong demand for Michael Kors products as we continue to offer a compelling assortment of luxury merchandise and exceptional service in a jet set store environment. The net sales growth of 76% in our North America wholesale segment reflects the continued successful conversion to shop-in-shops in department stores as well as exceptional comparable store sales. We continue to gain brand acceptance in Europe as evidenced by the 97% sales growth we achieved in this region. Finally, in our licensing segment, we achieved 13% growth, which was driven primarily by ongoing strength in watches. We remain very excited about the long term growth prospects for our company as a global luxury lifestyle brand.”

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