Michael Kors Q3 Profit, Sales Beat Estimates; Stock Surges

(RTTNews) - Michael Kors Holdings Limited (KORS), a global luxury lifestyle brand, reported third-quarter net income of $294.6 million, or $1.59 per share compared to $303.7 million, or $1.48 per share, last year. On a constant currency basis, third-quarter earnings per share was $1.65. On average, 30 analysts polled by Thomson Reuters expected the company to report profit per share of $1.46 for the quarter. Analysts' estimates typically exclude special items.

Total revenue increased 6.3% to $1.40 billion from $1.31 billion in the third quarter of fiscal 2015. On a constant currency basis, total revenue increased 9.9%. Analysts expected revenue of $1.36 billion for the quarter.

Retail net sales increased 11.1% to $766.2 million driven primarily by e-commerce sales from the company's digital flagships and 114 net new store openings since the end of the third quarter of fiscal 2015. Comparable store sales decreased 0.9%. On a constant currency basis, retail net sales grew 15.7%, and comparable store sales increased 2.0%.

Wholesale net sales increased 0.3% to $575.5 million and on a constant currency basis, wholesale net sales grew 3.0%.

John Idol, CEO, said, "We are pleased with our third quarter results, as we delivered revenue, comparable store sales and earnings growth ahead of our expectations. Our performance was driven primarily by strong consumer response to our luxury fashion product offering, particularly in our accessories and footwear categories, the continued momentum in our digital flagship business and outstanding growth in our international markets."

The company's stock jumped 15.63 percent in pre-market. Including licensed locations, there were 857 Michael Kors stores worldwide at the end of the third quarter of fiscal 2016.

For the fourth quarter of fiscal 2016, the company expects total revenue to be in the range of $1.13 billion to $1.15 billion, which includes approximately $36 million of additional sales due to the 53rd week. On a constant currency basis, total revenue is expected to increase in the high-single digit range. The company expects comparable store sales to be flat on a reported basis and to increase in the low single digits on a constant currency basis. Earnings per share are expected to be in the range of $0.93 to $0.97 for the fourth quarter of fiscal 2016. The company expects foreign currency to impact EPS by approximately $0.02.

For fiscal 2016, the company expects total revenue to be approximately $4.65 billion. On a constant currency basis, total revenue is expected to increase in the low-double digit range. The company expects a mid-single digit comparable store sales decrease on a reported basis and a low-single digit decrease on a constant currency basis. Earnings per share are expected to be in the range of $4.38 to $4.42 for fiscal 2016. The company expects foreign currency to impact EPS by approximately $0.20.