Michael Kors Holdings Ltd. (NYSE: KORS) announced its first quarter results for the 2018 fiscal year. The luxury brand posted results of decreased revenue from the previous year’s first quarter, but ended up beating estimates. Shares jumped on Tuesday at open and were up over 17 percent.
The company reported that revenue decreased by 3.6 percent to $952.4 million from the previous fiscal year’s first quarter of $987.9 million, but still beat analysts estimates of $918.6 million, according to Thomson Reuters.
The company also posted that retail net sales had increased 10.1 percent to $619.9 million, which was mainly driven by the opening of 67 new stores since 2017 as well as the acquisition of the Greater China license.
Michael Kors also reported that net income attributable to the company was $125.5 million or $0.80 per share. The previous first quarter of last year was $147.1 million or $0.83 per share, which is about a 14.6 percent decrease year over year.
The company had 838 operating retail stores at the end of the fiscal quarter compared to 771 last year. Included licensed locations, Michael Kors had 979 stores worldwide at the end of the 2018 first quarter.
“Our first quarter performance exceeded our expectations, driven largely by better than anticipated retail comparable sales results in both North America and Europe. We are encouraged by our first quarter performance, although we continue to believe that fiscal 2018 will be a transition year for our company, as we focus on laying the foundation for the future by executing on our strategic plan, Runway 2020.” said John D. Idol, the company’s chairman and CEO.
Recently, Michael Kors had purchased another luxury brand, Jimmy Choo, for $1.2 billion. The company’s purchase of Jimmy Choo was to expand its product line and create a group of
"This will not be [Michael Kors'] last acquisition," CEO Idol told CNBC in a phone interview shortly after the acquisition was announced.
“We believe that the development of a global fashion luxury group will increase long-term shareholder value as we create a more diverse product portfolio, increase our exposure to international markets and unlock additional opportunities for future growth." said Idol in the earnings report.
With the better than predicted first quarter earnings report, Michael Kors has raised its guidance for the rest of the fiscal year.
The company expects revenue between $1.035 billion and $1.055 billion for the second quarter, but the full year outlook, the company expects approximately $4.275 billion. Diluted EPS is expected to be between $3.62 to $3.72. These estimates do not include expectations relating to Jimmy Choo.