(A full report on Michael Kors was published April 15 on Reality Check, subscription required.)

SAN DIEGO (TheStreet) -- When Michael Kors (KORS) reports earnings Wednesday morning, it could be a blowout. Or at least better than expected -- that is if a steady stream of analyst recommendations and reiterations, on the eve of earnings, is any indication.

Typical is an analyst at Piper Jaffray, who just last week encouraged investors to buy the shares ahead of earnings.

Investor enthusiasm is understandable. In the fourth quarter Kors was the outlier, outperforming its peers even as big customers, like Macy's (M) - Get Report, were posting slower traffic. In the first quarter Macy's traffic was slow, too, but not to worry: It's Kors we're talking about and (sarcasm alert) it transcends everything else going on in retail and, especially, at its wholesale customers.

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But there's a flipside to the story. And while it may be early, it would be foolhardy for investors -- caught up in what a great investment Kors has been -- to dismiss out of hand.

Barclays, one of the few firms to veer from the bullish pack, wrote a report earlier this year aptly headlined, "Running Low on Jet Fuel." From the report:

An impressive multi-year track record has led the brand to a point of maturity earlier than anticipated...

Kors itself has been saying for quarters that its growth streak isn't likely to continue. Typical were CFO Joe Parson's comments on the November earnings call, when he said:

We could continue to caution you that, very consistent with what we have said, our business will normalize, which means that our markdowns and allowances will normalize, which will have an impact on margins.

And there's something else, which I highlighted last month in a report on Reality Check, where Kors is red-flagged: Performance at Kors' North American Wholesale, which represents nearly half of all revenue, may be skewed by sales to offshore licensees, including a related party.

The related Party in question, Kors Far East Holdings, is controlled by Hong Kong billionaire Silas Chou and his partner, Lawrence Stroll, as well as Kors CEO John Idol and designer Michael Kors himself. Its territories: China, Hong Kong, Macau and Taiwan.

From Reality Check:

What Kors doesn't disclose, but was confirmed to me after I asked the question multiple ways: Geographic licensing is booked as North American wholesale revenue.

Just how much of wholesale revenue came from geographic licensees? How much from the related party? How would whole growth be without the added boost from the geographic licensees?

Kors doesn't say, and those are critical questions, especially in light of last quarter's out-of-the-ballpark results. One ex-retail executive told me he was mystified by Kors' strength, especially when his contacts at the big retailers were telling him how promotional they had to be to sell Kors' products.

When companies disclose a related party, investors often ignore the disclosure because 'it's disclosed -- so nothing to worry about.' Which is why, for some companies, I view disclosure as hiding in the open.

It's unclear whether that's the case at Kors, but when a related party is controlled by the company's key executives and investors, it should -- in the least -- sound a few sirens. That's especially true in light of Kors' most recently reported quarter, in which it was the outlier.

Furthermore, Kors doesn't disclose how much it sells to the related party, only the amount the related party sells in.

Reality: With a company that has done as well as Kors -- as quickly as Kors has done it -- many investors prefer to look the other way, especially if its stock has been a money-maker.

Without question, Kors has deserved the accolades it has received; it's hard not to be impressed with its growth. But with a lack of disclosure on the amount of goods sold to its related party, the outperformance vs. its peers and customers, the company's own warnings that its growth can't last and the stock acting like it can -- there's little room for error.

This may not be the quarter that matters. Then again, even with all of the analyst support, maybe it is.

-- Written by Herb Greenberg in San Diego

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Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security. He can be reached at herbonthestreet@thestreet.com.