May 27, 2015
posts slowest revenue growth since going public Michael Kors
May 27, 2015
Michael Kors Holdings Ltd reported its slowest quarterly revenue growth since it went public in December 2011 as demand for its handbags and accessories weakened in North America.
Shares of the company, which also forecast full-year sales and profit below analysts' expectations, fell about 12 percent in premarket trading on Wednesday.
Michael Kors' revenue rose 17.8 percent in the fourth quarter, slowing sharply from the growth of 29.9-74.4 percent it posted for the past 13 quarters.
Same-store sales in North America fell 6.7 percent. Analysts on average had expected a rise of 4.4 percent, according to research firm Consensus Metrix.
Michael Kors' margins fell to 58.4 percent in the quarter from 59.9 percent, a year earlier, as the company aggressively offered discounts to attract shoppers.
In contrast, rivals Coach Inc and Kate Spade & Co have been cutting back on promotions to boost their profits.
Michael Kors has been expanding heavily, opening stores and distributing to retailers such as Macy's Inc, which has led to brand fatigue among shoppers, analysts say.
The handbag maker forecast revenue of $4.7 billion-$4.8 billion and a profit of $4.40-$4.50 per share for the year ending March 2016.
Analysts were expecting revenue of $5.05 billion and earnings of $4.70 per share, according to Thomson Reuters I/B/E/S.
The company's net income rose to $182.6 million, or 90 cents per share, in the quarter ended March 28 from $161 million, or 78 cents per share, a year earlier.
Revenue rose to $1.08 billion from $917.5 million.
For the fiscal year, sales increased 32% to $4.4 billion from $3.3 billion in fiscal 2014, the company said.
For the full year, it expects revenues of between $4.7 billion and $4.8 billion and diluted earnings per share of between $4.40 and $4.50.
Michael Kors' shares were trading at $53.42 before the bell.
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