On Jun 1, 2013, Zacks Investment Research upgraded
Michael Kors Holdings Limited
) to a Zacks Rank #1 (Strong Buy). Shares of this specialty
retailer of apparel, accessories, cosmetics and footwear have
amassed a year-to-date return of roughly 21%.
Why the Upgrade?
Michael Kors has been witnessing rising earnings estimates on
the back of better-than-expected fourth-quarter fiscal 2013
results. The impressive results were attributable to growth
across all business segments and geographies owing to the surge
in demand and shop-in-shop store experience. Moreover, margin
expansion contributed to the bottom-line growth.
The company declared sturdy fourth-quarter results on May 29,
2013, wherein earnings of 50 cents a share not only surpassed the
Zacks Consensus Estimate of 37 cents but also portrayed a
significant increase from 21 cents earned in the year-ago
If we look at the company's earnings surprise history, Michael
Kors has outperformed the Zacks Consensus Estimate for 6 straight
quarters by an average of 55%. In the recent concluded quarter,
the company beat the Zacks' Estimate by 35.1%. The long-term
expected earnings growth rate for this stock is 27.5%.
Michael Kors' total revenue soared 57.1% to $597.2 million in
the quarter, and came ahead of the Zacks Consensus Estimate of
$541 million. Retail net sales grew 58.8% to $272.7 million,
reflecting comparable-store sales growth of 36.7% and the opening
of net 67 new stores. Wholesale net sales surged 59.4% to $304.7
million, whereas licensing revenue jumped 15.7% to $19.8
Management now projects total revenue in the range of $555
million to $565 million for first-quarter fiscal 2014 with
expected comparable-store sales growth of 20%. Earnings are
forecasted to be in the band of 46 cents to 48 cents a share for
Michael Kors now envisions total revenue between $2.65 billion
and $2.75 billion and comparable-store sales growth of 15% to 20%
for fiscal 2014. Earnings are anticipated to be in the range of
$2.43 to $2.47 per share for the fiscal year.
Following an upbeat guidance, the Zacks Consensus Estimate for
fiscal 2014 rose 6.8% to $2.53 per share in the last 7 days. For
fiscal 2015, the Zacks Consensus Estimate jumped 3.4% to $3.02
per share over the same time frame.
Other Stocks to Consider
Apart from Michael Kors, there are other stocks with a
favorable Zacks Rank that are capable of continuing with their
upbeat performances. These include
Flowers Foods, Inc.
Bon-Ton Stores, Inc.
), all carrying a Zacks Rank #1 (Strong Buy).
BON-TON STORES (BONT): Get Free Report
DILLARDS INC-A (DDS): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis
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