Investors Cheer Stellar Numbers Of Michael Kors Holdings Ltd (NYSE:KORS)
On November 5, 2013 a global luxury lifestyle brand, Michael Kors Holdings Ltd. (NYSE:KORS) announced its financial results for 2Q14 ended September 28, 2013; marking 30th consecutive quarter of growth with over 23% increase in comparable stores sales. Driven by strong demand for its trendy handbags and watches, the company reported higher than expected 39% jump in quarterly revenue which was $740.3 million. Retail net sales grew 46.8% to $355.6 million given the significant growth in comparable store sales and over 80 new store openings since the end of 2Q13.
The company also reported 65.4% growth in licensing revenue to $32.9 million and about 30% growth in wholesale net sales to $351.9 million. As a result of this stunning sales performance and upbeat revenue, gross profit increased to $449.9 million or over 42% and as a percentage of total revenue increased to about 61% compared to 59% in the 2Q13. Income from operations as a percentage of total revenue grew to 29.9% in 2Q14 compared to 29.6% in 2Q13. Overall the income from operations grew 40.7% to $221.5 million compared to $157.9 million in 2Q13.
The company reported total of 477 Michael Kors stores across world as at September 28, 2013 with 352 retail stores including concessions and 125 additional stores operated through licensing partners.
Sign of economic turnaround in the U.S. and Europe helped boost revenues for these companies given the surge in demand for affordable luxury items. The stock has soared almost 300% since its IPO in 2011 where it offered shares at a price of $20 a share. This Hong Kong based company has consistently outperformed several US rivals including Coach, Inc. (NYSE:COH) and Tory Burch in the accessible luxury category.
Coach, Inc. earlier reported its earnings for 1Q14 on October 22, 2014 with 6.8% drop in comparable store sales, 1% decline in direct to consumer sales and about same decline in total North American sales which was to $778 million. International sales also declined marginally to $365 million compared to $367 million in a year ago quarter. Whereas Michael Kors Holdings Ltd (NYSE:KORS) reported 31% jump in quarterly same store sales in North America to $618.3 million, while over 100% jump in European sales to $114 million.