The firm said it initiated coverage on the designer handbag, shoes, clothing, and accessories retailer as it believes the company's North American business is maturing.
"Michael Kors' growth trajectory leads retail, with multiple growth opportunities from categories/geographies both in the U.S and internationally," Oppenheimer said.
"While international growth is in early innings, North America is maturing, with continued strength in wholesale offset by slowing retail," the firm added.
Separately, 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 multiple 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 42.7%. 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 4.17, which clearly demonstrates the ability to cover short-term cash needs.
- MICHAEL KORS HOLDINGS LTD has improved earnings per share by 40.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MICHAEL KORS HOLDINGS LTD increased its bottom line by earning $3.21 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $3.21).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Textiles, Apparel & Luxury Goods industry average. The net income increased by 42.0% when compared to the same quarter one year prior, rising from $145.81 million to $206.99 million.
- The gross profit margin for MICHAEL KORS HOLDINGS LTD is rather high; currently it is at 61.05%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.59% is above that of the industry average.
- You can view the full analysis from the report here: KORS Ratings Report