Michael Kors Profit Surges, Lifts FY Outlook; Shares Up

(RTTNews) - Michael Kors Holdings Ltd. (KORS) Tuesday reported a jump in profit for the second quarter, as the luxury goods company showed strong momentum of its products globally with revenue surging 39 percent.

The company once again lifted its earning outlook for the full year 2014. Following the news, shares of Michael Kors rose six percent on the New York Stock Exchange.

For the fiscal year 2014, Michael Kors now expect earnings in the range of $2.77 to $2.81 per share on revenues of $2.9 billion to $3.0 billion. The company had earlier lifted its initial full year outlook in August while reporting first-quarter results. Twenty-one analysts polled by Thomson Reuters currently expects full-year 2014 earnings of $2.78 per share on revenues of $2.99 billion.

Previously, the company estimated earnings of $2.67 to $2.69 per share with revenues between $2.8 billion and $2.9 billion. Meanwhile, the company continues to see comparable store sales growth of about 20 percent.

The Hong Kong-based fashion retailer's second-quarter profit surged to $145.8 million or $0.71 per share from $97.8 million or $0.49 per share last year. On average, 21 analysts expected a profit of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.

Chief Executive John Idol said, "Our strong financial results in the second quarter underscore Michael Kors' expanding brand awareness and global presence."

Revenue for the second quarter grew 38.9 percent to $707.4 million from $513.1 million last year. Nineteen analysts had a consensus revenue estimate of $725.91 million for the quarter.

Comparable store sales increased 22.9 percent.

Idol said the revenue growth reflected "strong acceptance" of its fashion luxury products. "Overall, we continue to see great demand for Michael Kors as a global luxury lifestyle brand," he added.

Sales in North America grew 31 percent and comparable store sales increased 21 percent, while Europe sales surged 101 percent with comparable store sales growth of 45 percent.

Michael Kors' second-quarter gross margins advanced to 60.8 percent from 59.3 percent last year.

For the third quarter of fiscal 2014, the company expect earnings in the range of $0.83 to $0.85 per share, with revenues of $845 million to $855 million. Analysts currently anticipate a second-quarter profit of $0.85 per share on revenues of $841.16 million.

KORS is currently trading at $79.76, up $4.98 or 6.66%, on a volume of 8.7 million shares, above the three-month average volume of 3.6 million.