Michael Kors Holdings Ltd

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KORS : NYSE : Consumer Goods
$37.33 | %
Today's Range: 37.23 - 38.05
Avg. Daily Volume: 2752800.0
04/28/17 - 4:03 PM ET

Financial Analysis


MICHAEL KORS HOLDINGS LTD's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. MICHAEL KORS HOLDINGS LTD has weak liquidity. Currently, the Quick Ratio is 0.94 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 6.24% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)1352.81397.48
EBITDA ($mil)398.1454.32
EBIT ($mil)342.4409.31
Net Income ($mil)271.3294.59


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)369.9696.82
Total Assets ($mil)2771.02534.22
Total Debt ($mil)147.83.98
Equity ($mil)1852.11975.54


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin59.5659.53
EBITDA Margin29.4232.51
Operating Margin25.3129.29
Sales Turnover1.671.81
Return on Assets27.2933.33
Return on Equity40.8342.75
Debt Q3 FY16 Q3 FY15
Current Ratio2.043.93
Debt/Capital0.070.0
Interest Expense3.40.63
Interest Coverage100.71647.64


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)162.44179.41
Div / share0.00.0
EPS1.641.59
Book value / share11.411.01
Institutional Own % n/a n/a
Avg Daily Volume2727654.02751231.0

Valuation


HOLD. MICHAEL KORS HOLDINGS LTD's P/E ratio indicates a significant discount compared to an average of 23.98 for the Textiles, Apparel & Luxury Goods industry and a significant discount compared to the S&P 500 average of 24.92. Conducting a second comparison, its price-to-book ratio of 3.30 indicates a premium versus the S&P 500 average of 2.99 and a significant discount versus the industry average of 5.12. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, MICHAEL KORS HOLDINGS LTD proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
KORS 8.54 Peers 23.98   KORS 5.32 Peers 18.16

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

KORS is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

KORS is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
KORS 9.36 Peers 20.74   KORS NM Peers 2.03

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

KORS is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

KORS's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
KORS 3.30 Peers 5.12   KORS 0.68 Peers 1.75

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

KORS is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, KORS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
KORS 1.32 Peers 2.19   KORS 0.72 Peers 5.78

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

KORS is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

KORS significantly trails its peers on the basis of sales growth

 

 

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