Michael Kors Holdings Ltd. (NYSE: KORS) on Wednesday reported fiscal fourth-quarter sales and earnings that missed analysts’ estimate. The company also announced to close 100 to 125 locations over the next two years.
The retailer of apparel, handbags and accessories said total sales fell 11.2 percent to $1.06 billion in the fourth quarter, compared with $1.2 billion a year earlier. Analysts polled by Thomson Reuters had expected sales of $1.05 billion.
The company also reported a loss of $26.8 million, or 17 cents per share in the quarter ended April 1, 2017, compared with a profit of $177 million, or 98 cents per share, a year earlier. Excluding certain items, the company earned 73 cents a share, beating analysts’ estimates of 70 cents a share.
John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels. In addition, our product and store experience did not sufficiently engage and excite consumers. We acknowledge that we need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products. Looking ahead, as we expand the fashion innovation in our accessories assortments, right-size our store fleet and elevate our store experience, fiscal 2018 will be a transition year in which we establish a new baseline before returning to long-term growth. We have a strong brand, led by Michael Kors, with a history of fashion innovation and leadership, a global footprint with stores positioned in the best locations around the world and the marketing expertise to effectively convey our fashion stories."
The company also plans to close 100 to 125 full-price stores over the next two years in order to improve profitability. It expects to generate an annual saving of $60 million as a result.
Michael Kors shares fell nearly 10 percent to $32.69 per share in the early trading.