Shares of the global luxury lifestyle brand,
Michael Kors Holdings Ltd
) has gained 4.8%, since its third-quarter earnings announcement
on Feb 4, 2014. The company's spectacular third-quarter fiscal
2014 results came on the back of an impressive holiday sales
season owing to strong demand for its luxury brands.
The company is seeking to carve a niche in the high-end retail
sector by broadening its footprint in strategic markets and
offering merchandise that caters to the elite. In addition to its
watch and handbag collection, Michael Kors is now focusing on
enhancing apparel, footwear and other miscellaneous categories to
compete better with peers like
Ralph Lauren Corp.
Moreover, the company plans to invest additional capital in its
fourth quarter, which is expected to be diverted towards the
opening of 9 new retail stores as well as its ongoing
shop-in-shop conversions and investments to develop
infrastructure and systems.
This Zacks Rank #1 (Strong Buy) stock also achieved a new 52-week
high of $94.43 on the last trading day, when it eventually closed
at $94.22, amassing a return of 66.3% over the last one year.
Facilitated by robust performance across all segments and
geographies, the retailer's revenues for the first time surpassed
the $1 billion mark, at $1.01 billion, handily beating the Zacks
Consensus Estimate of $860 million and escalating nearly 59% year
The company's earnings per share came in at $1.11, cruising ahead
of the Zacks Consensus Estimate of 86 cents and surging 73.4%
year over year. Not only in this quarter, but Michael Kors has
performed impressively in the last few quarters, as on an
average, the company has delivered a positive earnings surprise
of roughly 43.1% over the last 9 quarters.
The company also has long-term EPS growth of 25.4%, significantly
greater than the peer group growth rate of 12.3%, further adding
optimism to the investors' outlook.
Robust third-quarter performance prompted management to provide
an upbeat fourth quarter and full-year 2014 guidance. Management
expects fourth-quarter revenues to be $790-$800 million,
comparable store sales to increase 15%-20% and earnings per share
to be 63-65 cents. The Zacks Consensus Estimate is pegged at 65
cents that dovetails with the upper end of the company's guidance
Michael Kors currently trades at a forward P/E of 30.2x, an 86.7%
premium to the peer group average of 16.18x. The last traded
price is 1.3% below the Zacks Consensus average analyst price
target of $95.50. Average volume of shares traded over the last 3
months stands at approximately 4,581.7K.
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