On Jul 1, 2014, Zacks Investment Research upgraded
Michael Kors Holdings Limited
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Michael Kors is fast emerging as a giant in the luxury retail
space. The company is best known for its handbags and small leather
goods collection, which is rapidly gaining market share in North
America and outpacing its peers. In addition, the company is
presently focused on enhancing its apparel, footwear and other
miscellaneous categories to widen its portfolio.
Therefore, to capitalize on its ever-increasing popularity,
especially overseas, Michael Kors has taken up store
expansion in a big way. To further increase its brand visibility,
the company has been collaborating with leading
department/specialty retail stores in order to convert department
store doors to shop-in-shops. These initiatives will continue to
boost its revenues and margins, going forward.
This was well reflected in the company's stellar fourth-quarter
fiscal 2014 results, following which estimates have been
northbound. Moreover, this luxury retailer has delivered positive
earnings surprises in the trailing four quarters with an average
beat of 18.2%. The long-term expected earnings growth rate for this
stock is 25.4%.
The company's quarterly earnings per share of 78 cents came way
ahead of the Zacks Consensus Estimate of 68 cents while rising
56.0% year over year. Revenues of $917.5 million handily surpassed
the Zacks Consensus Estimate of $823.0 million and grew nearly
53.6% year over year. Strong performance across all segments and
geographies facilitated this growth.
Moreover, comparable store sales (comps) increased 26.2%, marking
the 32nd straight quarter of comps growth.
Given the robust performance, management provided an encouraging
outlook for fiscal 2015. Revenues are expected in the range of
$4.0-$4.1 billion, while comps are projected to increase in the
high teens. Earnings are anticipated to be within $3.85-$3.91 per
The Zacks Consensus Estimate for fiscal 2015 and 2016 increased
3.1% to $3.94 and 3.0% to $4.70 per share respectively over the
last 60 days.
Other Stocks to Consider
Other retailers worth considering include
Vince Holding Corp
G-III Apparel Group, Ltd.
). Hanesbrands and Vince Holding sport a Zacks Rank #1
whereas G-III Apparel is a Zacks Rank #2 (Buy) stock.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
HANESBRANDS INC (HBI): Free Stock Analysis
G-III APPAREL (GIII): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis Report
VINCE HOLDNG CP (VNCE): Free Stock Analysis
To read this article on Zacks.com click here.