Source: Company reports/Coresight Research

Fiscal 1Q19 Results

Michael Kors reported fiscal 1Q19 revenues of $1.20 billion, up 26.3% year over year and above the consensus estimate of $1.14 billion. Diluted EPS was $1.22, above the consensus estimate of $0.94 and up 52.5% from the year-ago quarter. Total revenues of $1.20 Billion reflected $173 million of incremental revenues from Jimmy Choo and an 8% increase in Michael Kors revenues compared to last year. Michael Kors retail revenues increased 3%, which reflects nine net new store openings, bringing the total global store fleet to 191 stores. The Michael Kors Wholesale business revenues increased 20% for the quarter. The company reported that the growth was above expectations due to better sell-through and a shift in shipment timing from 2Q to 1Q. The company reported that it is making progress on its Runway 2020 plan, which focuses on product innovation, brand engagement and customer experience. The customers are responding to “Kors Style,” which is head-to-toe dressing, which has helped the company to increase revenues “as our customers continue to engage with our lifestyle vision in both menswear and womenswear.” Michael Kors licensing revenues decreased by 5% to $27.5 million from $28.9 million the prior year. The company reported favorable responses to its fashion swim line offering in watches as well as continued growth in Michael Kors ACCESS smartwatches. However, the results were not enough to offset the continued decline of fashion watches and the transition from the fashion jewelry line to a new elevated fine jewelry collection.