(KORS) is back to a Zacks #1 Rank after another stellar earnings
report this month. While other retailers are missing their comps,
lowering guidance, and generally blaming the weather for
everything, this global brand is hitting its growth stride.
In fact, since March of 2012 after the company's first quarterly
report following their IPO in December 2011, KORS has consistently
been a #1 Strong Buy or #2 Buy and we've seen the stock rise from
the mid-$40's to $70.
This earnings momentum is built on high double-digit sales growth,
global expansion in branded outlets and top high-end retailers, and
a wide diversity of apparel and accessories for men and women that
command must-have fashion sense. They also position many of their
products at more affordable price points, what the company calls
Still Early in KORS Global Domination
The Zacks proprietary Price & Consensus chart below shows the
rapid rise in analyst earnings estimates. While it may be tempting
to think that this kind of growth must eventually level off (think
AAPL), most analysts believe that this brand, and management's
multi-channel strategy and superior execution, have a few more good
years left in them.
Here's how my colleague Brian Bolan recently characterized the KORS
"Over the last three earnings reports, the company posted a
positive revenue surprise in each, and these are not little beats,
they are big. The December 2012 quarter saw a massive beat of $97M
or 17.7% ahead of expectations. That propelled the income statement
to post a bottom line beat of 60%.
The March 2013 quarter had a $55M beat, 10% above expectations. The
bottom line saw a 35% beat in that quarter. And the most recent
quarter saw revenues come in $69M ahead of expectations for a 12%
beat. The analysts are getting a little better, so the bottom line
was only a beat of 24%, and I say only sarcastically."
Brian was also writing about KORS because he believes that
institutional investors are still getting to this story late and as
more portfolio managers discover the company, the stock is destined
for loftier heights.
I happen to agree, as I bought the stock for Zacks Follow The Money
trader in early July at $63. And so I was glad to see a big "whale"
join me a few weeks later as Steve Mandel of Lone Pine Capital
announced in an SEC filing that his fund has acquired a 5.2%
If you are not familiar with the KORS brand and its hundreds of
products from head to toe, including watches, just go to the
(M) website and see what they have to offer. At least now you are
familiar with the business story and its phenomenal high
double-digit growth that has enough diversity and global reach to
ride out the retailer woes of "too hot, too cold, too wet, too
It also helps that Kors is currently the "it" brand when it comes
to fashion tastes. I'm betting it can maintain the allure and
In a fickle storm of battered fashion stocks like
Abercrombie & Fitch
(ANF), Michael Kors is one name that will probably never blame the
weather for anything.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs
Follow The Money
ABERCROMBIE (ANF): Free Stock Analysis Report
AEROPOSTALE INC (ARO): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
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