Shares of fashion-maker and retailer Michael Kors Holdings Ltd (NYSE: KORS) finished trading down 5.7% on Dec. 7, more than double the 2.3% decline for the S&P 500 in what turned into one of the worst days for stocks in 2018. Michael Kors joined hundreds of other consumer-goods stocks that took a beating today, following the release of the monthly jobs report from the U.S. Department of Labor.
In short, the jobs report wasn't particularly bad, per se, but it was a touch underwhelming based on expectations. The unemployment rate held steady at 3.7% -- the lowest it has been in decades -- but the estimated 155,000 jobs added came in below expectations. Average hourly wages were up 3.1% from last year and up slightly from the prior month.
Michael Kors stock got marked down today, but it might not be a bargain just yet. Image source: Getty Images.
Yet continued concerns about China and the global economy -- particularly a looming trade war with the U.S. if ongoing negotiations fail to bear fruit -- continue to weigh on investors. You can factor in a huge surge in oil prices today -- crude futures spent much of the day up more than 4% before cooling off and finished trading up 2% -- which played some role in today's sell-off, too.
While the market was likely selling off Michael Kors and a litany of other consumer-brand stocks on today's bigger macro fears, investors should be more focused on specific and more material things with the company. After all, despite a relatively decent second fiscal quarter with a positive outlook , its stock price is down by nearly half since the late-September announcement that it was acquiring Versace .
To put it bluntly, there are serious concerns that it not only overpaid for the fashion house, but that it will struggle to combine yet another iconic -- if disparate -- fashion brand into a single, well-run company that delivers long-term value to investors. It's readily apparent that acquiring Versace will hurt the bottom line more than it will help in the short term. If management can't deliver higher long-term returns in trade for the short-term pain, then its latest splashy acquisition will be remembered far more than today's sell-off.
In summary, I wouldn't put too much weight into today's sell-off as a sign of weakness in the company, but I also wouldn't call it a buying opportunity. Until management shows that it can effectively combine its acquisitions into a cohesive, more profitable company, Michael Kors is probably better off in your wardrobe than your portfolio.
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Jason Hall has no position in any of the stocks mentioned. The Motley Fool owns shares of Michael Kors Holdings. The Motley Fool has a disclosure policy .