Michael Kors Holdings Limited (NYSE:KORS) (the “Company”), a global luxury lifestyle brand, today announced its financial results for its fiscal 2014 third quarter ended December 28, 2013.
John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “Michael Kors enjoyed an outstanding holiday season, as global brand awareness continued to drive strong demand for our luxury product. Comparable stores sales increased 28% which exceeded our expectation and represents our 31 st consecutive quarter of growth. We believe that our consistently strong performance is attributable to the creative vision of Michael Kors and his talented design team as well as the distinctive jet-set in-store experience that we provide in both our retail stores and our shop-in-shops. We remain very excited about our future growth prospects as Michael Kors continues to gain momentum as a global luxury lifestyle brand.”
For the third quarter ended December 28, 2013:
- Total revenue increased 59.0% to $1.0 billion from $636.8 million in the third quarter of fiscal 2013.
- Retail net sales increased 51.3% to $503.4 million driven by a 27.8% increase in comparable store sales and 98 net new store openings since the end of the third quarter of fiscal 2013. Wholesale net sales increased 68.2% to $461.4 million and licensing revenue increased 59.0% to $47.4 million.
- Gross profit increased 61.6% to $619.5 million, and as a percentage of total revenue increased to 61.2% compared to 60.2% in the third quarter of fiscal 2013.
- Income from operations was $343.2 million, or 33.9% as a percentage of total revenue, as compared to $204.8 million, or 32.2% as a percentage of total revenue, for the third quarter of fiscal 2013.
- Net income was $229.6 million, or $1.11 per diluted share, based on 206.1 million weighted average diluted shares outstanding. Net income for the third quarter of fiscal 2013 was $130.0 million, or $0.64 per diluted share, based on 202.8 million weighted average diluted shares outstanding.
- At December 28, 2013, the Company operated 395 retail stores, including concessions, compared to 297 retail stores, including concessions, at the end of the same prior-year period. The Company had 138 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 533 Michael Kors stores worldwide at the end of the third quarter of fiscal 2014.
Mr. Idol continued, “Our results reflect broad-based strength with significant revenue growth across our retail, wholesale and licensing segments as well as in our North American and international markets. Revenue in North America grew 51% and comparable store sales increased 24%, with performance driven primarily by accessories and watch offerings. In addition, our North America wholesale segment generated another quarter of strong sales growth, particularly in our accessories and footwear categories, and we continued to benefit from shop-in-shop conversions in department stores. In Europe, revenue grew 144% in the third quarter, with exceptional comparable store sales growth of 73%, which we believe was driven by growing brand awareness and demand across regions. Lastly, in our licensing segment, revenue increased 59%, with continued demand in watches and eyewear. Looking ahead, we remain confident that Michael Kors’ distinctive positioning in the global luxury market will enable us to achieve strong long term growth for our shareholders.”