Shares of Michael Kors (KORS) were jumping 11% in afternoon trading following the company�s fiscal third-quarter earnings report.
This morning, the fashion brand reported earnings of $130 million, up from $39 million a year earlier. Earnings per share (a metric that includes preferred share impacts), grew to 64 cents from 20 cents. Revenue jumped 70% to $636.8 million. Both metrics were well ahead of the 38 cent per-share earnings and $530 million in revenue the company had previously forecast.
On average, analysts were predicting 41 cents per share on sales of $540 million.
Kors has been benefitting as the firm expands its retail presence, both in the U.S. and overseas, as well as increasing the percentage of business it does in the retail space vs. the wholesale business (which allows it to capture fatter margins). �The company expects to open 40 stores in North America in its current fiscal year; it ultimately sees 400 Kors stores dotting the region.
Morgan Stanley named the stock one of its top ideas in a note out today. �KORS continues to capitalize on the unique advantage created by founder Michael Kors� fame,� writes analyst Kimberly Greenberger �Our outlook calls for a 24% 5-year sales CAGR driven by rapidly expanding revenues across geographies, channels, and categories. We forecast a 35% bull case EPS CAGR and believe the likelihood of KORS� bull case playing out is higher than that of any other stock we cover.�
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