Michael Kors lifts earnings forecast
The namesake Hong Kong-based luxury goods retailer behind United States fashion designer Michael Kors has raised its earnings outlook, as sales surged in its fiscal fourth quarter to March.
New York-listed Michael Kors said yesterday it expected revenue in its fiscal fourth quarter to be in the range of US$350 million to US$360 million, compared with its previous forecast of US$350 million to US$355 million.
That would allow the company's earnings per share to be in the range of 14 US cents to 16 US cents, against the previous guidance of 10 US cents to 12 US cents per share. This forecast excluded a one-time gain recorded in the same quarter.
According to Thomson Reuters IBES Estimates, which tracks corporate earnings and guidance, analysts on average were expecting earnings of 13 US cents per share, based on the retailer's revenue of US$358.4 million in its fiscal fourth quarter.
Michael Kors said comparable store sales for the 11 weeks to March 17 increased 35.8 per cent, while comparable store sales for the 50 weeks to March 17 grew 39.3 per cent.
The company, which has steadily expanded from apparel into accessories and footwear since it was founded in 1981, maintained its previous guidance that total revenue for the year to March would be in the range of US$1.27 billion to US$1.28 billion. Its fiscal fourth quarter and fiscal 2012 earnings results will be announced on June 12.
In a statement, Michael Kors said it 'experienced certain operational difficulties transitioning to a new distribution facility' during the quarter to March.
This issue 'impacted [on] deliveries to wholesale customers and retail stores', the company said.
It anticipated this transition would be completed by the end of next month.
Chief executive John Idol has identified China as a priority for Michael Kors. He said last month that the company had prepared an ambitious slate of major store openings on the mainland, and in Hong Kong, Macau and Taiwan this year.
'We intend to open 15 stores in greater China this year. Over the next three to five years, we will have 100 stores open in this market,' Idol said. 'We think we're perfectly positioned to be one of the largest luxury goods companies in China.'
The estimated proportion of Michael Kors' business from handbags, small leather goods, watches, eyewear and footwear