Michael Kors Shares Soar as Holiday Quarter Tops Estimatesby
Michael Kors Holdings Ltd. shares rose the most in almost four years after holiday results exceeded analysts’ estimates, boosted by e-commerce sales and a new lineup of accessories.
Earnings climbed to $1.59 a share in the fiscal third quarter, which ended Dec. 26, the London-based company said in a statement on Tuesday. Analysts estimated $1.46 on average, according to data compiled by Bloomberg.
Kors’s accessories and footwear helped drive its performance during the quarter, the company said. Online sales also bolstered growth during a holiday period that was mediocre for many retailers. Currency fluctuations, however, weighed on Kors’s sales in Europe and other international markets.
The shares jumped 24 percent to $50.11, the biggest gain since February 2012. Kors had plunged 47 percent in 2015, reflecting slowing growth and broader concerns about the handbag market.
To adjust to shifting consumer preferences, the company is now selling smaller, crossbody bags that are often less expensive. Kors also improved its digital operations, helping it cope with sluggish mall traffic and stagnant tourist spending.
The company is also working on a line of technologically connected accessories with Fossil Group Inc. that will be announced at the Baselworld watch and jewelry show in March, Chief Executive Officer John Idol said on the conference call. The assortment will launch in stores in August, he said.
Sales rose 6.3 percent to $1.4 billion in the third quarter, beating the $1.36 billion that analysts had predicted. Still, the company’s fourth-quarter forecast was light of estimates. Kors expects earnings of 93 cents to 97 cents a share, versus the $1 predicted by analysts. Revenue will be as much as $1.15 billion, the company said. Analysts have projected $1.16 billion.