Michael Kors boosted sales more than a quarter year-over-year, thanks to better than expected contributions from its namesake brand and Jimmy Choo, the British luxury shoe maker acquired by the US-based fashion house last year.
Michael Kors shares rose more than 4 per cent in pre-market trading after reporting that revenue grew 26.3 per cent from a year ago to $1.2bn in the three months to the end of June. That included a $172.7m boost from Jimmy Choo, which Michael Kors bought for £896m in 2017. The Michael Kors brand also chalked up 8 per cent revenue growth, it said.
Net income attributable to the company came in at $186.4m, or $1.22 a diluted share, compared to $125.5m, or 80 cents a share, last year.
Analysts had been looking for revenue of $1.137bn and net income of $140.62m, or 92 cents a share, according to Thomson Reuters data. The company’s 0.2 per cent comparable sales growth, however, fell just short of estimates for 0.5 per cent.
The better than expected performance from the Michael Kors and Jimmy Choo brands prompted the company to raise its full-year adjusted earnings per share guidance by 25 cents to $4.90 — $5.00, and its revenue outlook from $5.1bn previously to $5.125bn.
The results will give hope to investors that Michael Kors is making progress in its efforts to restore its upscale image and better control product pricing, amid a fast-evolving retail environment. It has also benefited from the Jimmy Choo deal, which is expected to add between $580m and $590m to the company’s overall revenue this year.
“Our global fashion luxury group continues to see the benefits of our long term growth strategy which is driven by both the Michael Kors and Jimmy Choo brands,” said John Idol, chairman and chief executive. “Looking ahead we remain optimistic about our business for the remainder of fiscal 2019 and beyond.”
After rising 46 per cent in 2017, Michael Kors shares are up just 4.2 per cent so far this year.
Photo: AFP/Getty Images
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