This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Big Takeaways From Michael Kors' Earnings

Stocks in this article: KORS

NEW YORK (TheStreet) - Michael Kors (KORS) spooked investors on Monday after the handbags and accessories retailer reported better-than-expected quarterly earnings, but renewed fears about profitability. Specifically, concerns abounded about how the fashion retailer's inventory levels and markdowns are hitting the bottom line as well as its expenses related to growth investment.

"Our focus goes well beyond one year in order to support growth," Michael Kors Chairman and CEO John Idol said on the conference call. "Obviously we are making strategic investments" by expanding the store base, relocating stores and spending money on marketing, distribution and technology.

Michael Kors reported net income of $187.7 million, or 91 cents a share, for its fiscal first quarter, compared to $125 million, or 61 cents a share, in the year-earlier quarter. Analysts, according to Thomson Reuters, expected quarterly earnings of 81 cents a share.

Read More: Michael Kors vs. Coach: Battle For Handbags, Watches and Shoes

Revenue rose 43.4% to $919.2 million compared to last year's quarter. Retail net sales rose 47.5% to $480.2 million. Gross profit, as a percentage of revenue, rose 20 basis points to 62.2%. The company reported same-stores sales growth of 18.7% for its North American stores against consensus estimates of 17.6%.

Shares were down 6.6% to $76.43 on Monday.

Here are three big takeaways from the conference call: 1. Is Michael Kors opening too many stores? Not according to management.

Responding to criticism that the company has opened too many stores too fast, Idol said, "We absolutely disagree." Including licensed locations, there were 605 Michael Kors stores worldwide at the end of the first quarter of fiscal 2015, up from 555 at the end of the first quarter of fiscal 2014.

Read More: 5 Retailers Fighting Back Against Amazon for Back-to-School Sales

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,083.99 +53.78 0.30%
S&P 500 2,092.08 +10.20 0.49%
NASDAQ 4,812.9570 +39.4850 0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs