NEW YORK ( TheStreet) -- Michael Kors (KORS - Get Report) and Fossil (FOSL - Get Report) each surged in early trading after both specialty retailers posted quarterly earnings that blew past Wall Street estimates.
The Hong Kong-based Michael Kors said Tuesday that profit for its fiscal first quarter rose 82% over last year to $125 million, or 61 cents a share. Revenue jumped by 54.5% to $640.9 million over the same period a year earlier.
Analysts, according to Yahoo! Finance, expected the company to earn 49 cents a share on revenue of $570.5 million.
Shares surged 4.6% to $70.99 as the markets opened. The company's fiscal first quarter ended on June 29.Michael Kors is firing on all cylinders, which includes retail stores, wholesale and licensing agreements. At quarter's end, the company operated 328 retail stores, including concessions as well as 114 additional retail stores, operated through licensing partners. "Our exceptional first quarter financial results demonstrate the sustained strong demand for the Michael Kors luxury brand," Chairman and CEO John D. Idol said. "We attribute the ongoing momentum to our fashion design leadership combined with an aspirational jet-set luxury in-store experience. As we continue to successfully execute on our strategic initiatives, we remain excited about our future growth potential." In North America comparable store sales jumped 25%, "as our luxury accessories and ready-to-wear offering and jet-set in-store experience continue to resonate strongly with consumers," Idol said. "Sales in our North America wholesale segment increased 50%, driven by comparable store sales growth as well as the continued successful conversion of shop-in-shops in department stores." Across the Atlantic, European sales surged 144% in the first quarter, as growing brand awareness led to comparable store sales growth of 56%, the company said. Finally, revenue from its licensing segment increased 41%, driven primarily by the strength in watches and eyewear, it said. Michael Kors' gross profit rose 58% to $397 million -- 62% of total revenue, it said. The company said it expects total revenue for the second quarter to be in the range of $695 million to $705 million and comparable store sales growth of 15% to 20%. Second-quarter EPS are expected to be between 62 cents a share and 64 cents a share.