Michael Kors Holdings Ltd

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KORS : NYSE : Consumer Goods
$48.91 up 0.54 | 1.12%
Today's Range: 47.84 - 48.94
Avg. Daily Volume: 2918400.0
12/07/16 - 4:03 PM ET

Financial Analysis


MICHAEL KORS HOLDINGS LTD's gross profit margin for the second 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 0.57 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 10.80% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)1088.21129.98
EBITDA ($mil)265.0319.25
EBIT ($mil)208.6273.09
Net Income ($mil)160.9193.14


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)186.4431.54
Total Assets ($mil)2755.32419.96
Total Debt ($mil)384.49.54
Equity ($mil)1680.51883.99


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin59.2458.8
EBITDA Margin24.3528.25
Operating Margin19.1724.17
Sales Turnover1.71.86
Return on Assets28.2935.28
Return on Equity46.3945.31
Debt Q2 FY16 Q2 FY15
Current Ratio1.584.2
Debt/Capital0.190.01
Interest Expense1.40.38
Interest Coverage149.0728.23


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)164.23184.05
Div / share0.00.0
EPS0.951.01
Book value / share10.2310.24
Institutional Own % n/a n/a
Avg Daily Volume2832997.03723813.0

Valuation


HOLD. MICHAEL KORS HOLDINGS LTD's P/E ratio indicates a significant discount compared to an average of 24.75 for the Textiles, Apparel & Luxury Goods industry and a significant discount compared to the S&P 500 average of 25.16. For additional comparison, its price-to-book ratio of 4.75 indicates a significant premium versus the S&P 500 average of 2.79 and a discount versus the industry average of 5.34. The price-to-sales ratio is below the S&P 500 average and is well below 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 11.17 Peers 24.75   KORS 7.01 Peers 20.01

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 10.10 Peers 20.83   KORS 3.55 Peers 2.75

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.

 

Premium. 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 trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
KORS 4.75 Peers 5.34   KORS 2.11 Peers 5.25

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 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 1.71 Peers 2.24   KORS 3.55 Peers 6.70

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 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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