Michael Kors Profit Tops Estimate; Stock Down On Weak Q3 Outlook - Update

(RTTNews) - Michael Kors Holdings Ltd (KORS) on Tuesday reported an increase in second-quarter profit, as the luxury goods retailer benefited from strong sales in North America and Europe, with results topping Wall Street estimates.

The company provided some weak guidance for the holiday quarter, while for the full year slashed its comparable sales guidance and lifted the earnings and sales range.

Michael Kors' board also authorized a $1 billion share repurchase program.

Michael Kors shares slipped nearly 8 percent in morning trade on the New York Stock Exchange, following the announcement of results.

The Hong Kong-based retailer posted quarterly net income of $207 million or $1.00 per share, compared with $145.8 million or $0.71 per share last year. On average, 23 analysts polled by Thomson Reuters expected earnings of $0.89 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the second quarter jumped 42.7 percent to $1.1 billion from $740.3 million in the prior year. Twenty-one analysts had a consensus sales estimate of $978.6 million for the quarter.

Comparable store sales for the quarter climbed 16.4 percent.

Michael Kors' revenue in North America rose 29.8 percent from a year ago and Europe revenues more than doubled.

Retail sales increased 39.4 percent, led by new store openings and higher comparable store sales, and wholesale sales increased 46 percent, the company said in a statement.

For the third quarter, Michael Kors expects earnings of $1.31 to $1.34 per share on revenues of $1.27 billion to $1.3 billion. Analysts currently expect earnings of $1.34 per share on revenues of $1.3 billion for the quarter.

For the fiscal year 2015, the company now expect earnings of $4.13 to $4.18 per share on revenues of $4.3 billion to $4.4 billion. Earlier, earnings were estimated in the range of $4.00 to $4.05 per share on revenues of $4.25 billion to $4.35 billion.

Michael Kors expects full-year comparable store sales increase in the mid teens, from a prior guidance of high teens growth.

Analysts currently expect earnings of $4.07 per share on revenues of $4.36 billion for the year.

KORS is trading at $71.75, down $6.24 or 8.00%, on a volume of 12 million shares.