On Feb 7, 2014, Zacks Investment Research upgraded
Michael Kors Holdings Limited
), the global luxury lifestyle brand, to a Zacks Rank #1 (Strong
COACH INC (COH): Free Stock Analysis Report
G-III APPAREL (GIII): Free Stock Analysis
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MICHAEL KORS (KORS): Free Stock Analysis
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Why the Upgrade?
Michael Kors has been witnessing rising earnings estimates on the
back of strong fiscal third-quarter 2014 results and an enhanced
guidance. The company's spectacular results were driven by an
impressive holiday sales season owing to strong demand for its
Facilitated by robust performance across all segments and
geographies, the retailer's revenues surpassed the $1 billion
mark for the first time, coming in at $1.01 billion and handily
beating the Zacks Consensus Estimate of $860 million. Also, it
escalated nearly 59% year over 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 and it also has
long-term EPS growth of 25.4%.
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
Moreover, 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
The improved guidance triggered an uptrend in the Zacks Consensus
Estimates, as analysts became more constructive on the stock's
future performance. This is evident from the movement witnessed
in the Zacks Consensus Estimate that jumped 10.2% to $3.12 for
2014 and 8.9% to $3.79 per share for 2015 in the past 7 days.
Other Stocks to Consider
Other stocks in the textile-apparel sector that warrant a look
) with a Zacks Rank #1 (Strong Buy) and
G-III Apparel Group, Ltd.
) sporting a Zacks Rank #2 (Buy).