Michael Kors Q2 Profit Triples

Uptown Astor Crossbody bag from Michael Kors

New York—While Michael Kors Holdings Ltd. reported Tuesday that its second quarter earnings triples as sales jumped 74.4%, the company’s third quarter estimates were below analysts’ average estimate.

For the quarter ended Sept. 29, the designer company posted a net income increase of 113% to $97.8 million, or 49 cents a share, up from $31.6 million, or 22 cents a share, in the same quarter last year.

Net revenue surged to $532.9 million from $305.5 million in the same quarter last year.

The report handily beat analysts’ average estimate, expecting earnings of 40 cents a share on sales of $519.9 million.

“Michael Kors delivered another outstanding quarter with exceptional sales growth across our business segments and geographies,” said John Idol, chairman. “Our North America comparable store sales growth of 45.1% demonstrates the strong demand for Michael Kors products as we continue to offer a compelling assortment of luxury merchandise and exceptional service in a jet set store environment.”

Watch Sales Continue Strong

Total retail net sales increased 82% to $242.3 million driven by the jump in comparable store sales and the addition of 66 new stores during the quarter. European sales, too, surged 97% as the company expands its brand there.

Wholesale net sales increased 75% to $270.8 million. “The net sales growth of 76% in our North America wholesale segment reflects the continued successful conversion to shop-in-shops in department stores as well as exceptional comparable store sales,” Idol said.

Licensing revenue increased 13% to $19.9 million, driven primarily by continued strength in its watch business with Fossil.

Michael Kors reported earnings above estimates on Tuesday but the holiday season might not be so cheery for luxury wholesalers and retailers as its outlook for the important holiday quarter was below analyst expectations.

As for its third quarter, which will include holiday, Michael Kors Holdings forecast earnings between 37 to 39 cents a share, which was on the low end of analysts’ consensus for 39 cents a share.

 

 

 

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