The Zacks Analyst Blog Highlights: Michael Kors Holdings, Gildan Activewear, PVH and Lululemon Athletica

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For Immediate Release

Chicago, IL - October 20, 2017 - announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Michael Kors Holdings Limited (NYSE: KORS- Free Report ), Gildan Activewear Inc. (NYSE: GIL- Free Report ), PVH Corp. (NYSE: PVH- Free Report ) and Lululemon Athletica Inc. (Nasdaq: LULU- Free Report ).

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Here are highlights from Thursday's Analyst Blog:

Can Michael Kors' Strategic Plan Combat Comps Woes?

Michael Kors Holdings Limited 's (NYSE: KORS- Free Report ) positive earnings surprise, store optimization and global expansion bode well. Further, the company's decision to acquire Jimmy Choo gives an indication that it is focused on international fashion brands. However, waning top-line along with dismal comps and wholesale segment performance continues to act as headwinds. The company has taken several strategic initiatives to bring both the top line and comps back on growth trajectory.

Turn Around Strategy

Michael Kors' acquisition of Jimmy Choo will help diversify portfolio and tap international markets. The buyout is likely to be accretive in the low-single digits in fiscal 2020. In order to drive top-line growth, the company has been focusing on store expansion. In fiscal 2016, the company opened 142 new stores, which included 47 in the Americas and 95 worldwide. In fiscal 2017, it opened 159 net new stores openings, which includes 111 outlets related to the acquisition of the earlier licensed operation in Greater China. Given the scope for high profitability from company-owned stores, management is putting more emphasis on opening retail outlets.

Sales from Asia have shown tremendous improvement. The company had stated that it will continue with the expansion drive in Asia and also believes it has an opportunity worth $1 billion in the long term.

In an effort to increase the profitability in stores fleet, the company has announced its intention to close between 100 to 125 full priced retail stores over the next two years. Moreover, the company stated that it will incur one-time costs of nearly $100-$125 million related to store closures. Meanwhile, it anticipates annual saving of $60 million due to store closures as well as fall in depreciation and amortization related with these impairment charges.

Hurdles to Cross

Michael Kors' wholesale segment continues to pose concern. In first-quarter fiscal 2017, wholesale segment sales declined 23% to $303.6 million primarily due to dismal performance of Americas, European and Asia region, while on a constant currency basis, it fell 22.7%. In the fourth, third, second and first quarter of fiscal 2017, wholesale segment sales declined 22.8%, 17.8%, 18.4% and 7%, respectively.

Stiff competition, falling comps, aggressive promotional environment and waning mall traffic are making things tough for Michael Kors. We noted that comparable sales had fallen 5.9% in the first quarter of fiscal 2018, following declines of 14.1%, 6.9%, 5.4% and 7.4% in the fourth, third, second and first quarters, respectively.

Michael Kors which shares space with Gildan Activewear Inc. (NYSE: GIL- Free Report ), PVH Corp. (NYSE: PVH- Free Report ) and Lululemon Athletica Inc. (Nasdaq: LULU- Free Report ) is struggling with top-line performance. After registering meager growth of 0.2% in first-quarter fiscal 2017, it had declined 3.7%, 3.2% and 11.2% in the second, third and fourth quarters of fiscal 2017. In first-quarter fiscal 2018, revenues declined 3.6%.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.

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lululemon athletica inc. (LULU): Free Stock Analysis Report

PVH Corp. (PVH): Free Stock Analysis Report

Gildan Activewear, Inc. (GIL): Free Stock Analysis Report

Michael Kors Holdings Limited (KORS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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