NEW YORK (TheStreet) -- Michael Kors
(KORS - Get Report) shares are up 0.9% to $96.91 on Wednesday following the release of the company's fourth quarter earnings results.
The luxury clothes and handbags maker reported a 53.6% year over year quarterly revenue increase to $915.5 million, beating Wall Street's consensus estimate of $822.7 million.
The company reported net income of $161 million, a 59.4% year over year increase, or 78 cents per diluted share, 10 cents better than analysts had estimated.
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TheStreet Ratings team rates MICHAEL KORS HOLDINGS LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICHAEL KORS HOLDINGS LTD (KORS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KORS's very impressive revenue growth greatly exceeded the industry average of 17.5%. Since the same quarter one year prior, revenues leaped by 59.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KORS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.07, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, MICHAEL KORS HOLDINGS LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for MICHAEL KORS HOLDINGS LTD is rather high; currently it is at 61.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.68% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 98.06% to $268.36 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 65.01%.
- You can view the full analysis from the report here: KORS Ratings Report
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