Le 10 septembre 2015, 10:57 dans Humeurs • 0
The Gold Standard In The Retail Sector Michael Kors Holdings Ltd (NYSE:KORS) is a hot brand in the luxury retail sector. Since its listing, the company has posed a threat to its competitors Valentino UK Sale by stealing their market share. Earlier this month, the company reported outstanding results for its third quarter of fiscal year 2014 and demonstrated why it is considered one of the best retail companies. In this article, I will explore why investors should remain optimistic about the stock.
Staggering Q3PerformanceFor the third quarter of fiscal year 2014, Michael Kors managed to blow past analysts' expectations as usual. Revenues for the quarter jumped up 59% and stood at $1 billion up from $636.8 million in the comparable quarter last year. Diluted earnings per share for the quarter demonstrated an impressive growth of 73.4% and stood at $1.11, easily smashing the analysts' consensus of $0.86 per share. Moreover, the company successfully earned a 61% gross profit margin as is the norm for successful luxury brands.
Michael Kors operates in 3 business segments: retail, wholesale, and licensing. The retail sector is the major revenue contributor for the brand since it generates almost half of the company's revenue. Retail's net sales grew by 50% with a comparable store sales increase of 26.2%. This level of growth in same store sales is a massive figure for any retailer. Retail stores in the latest quarter vs. the previous year increased by 20.6%. This is indicative of the fact that the company is leveraging on its http://www.valentinosale.co.uk/ successful retail stores format because it has successfully opened 385 new stores since fiscal year 2007. This total was achieved by fully penetrating into North America through 274 stores and internationally by 111 stores. Other than revenues, the net income was also bolstered by the retail sector operations of the company as shown in the figure below.
The wholesale and licensing segments of the company also grew by 51.7% and 56.1% respectively. All three of the business segments are working hard to bolster the company's top and bottom lines. Moreover, it is the company's compelling product line offered at attractive prices that attracts demand from worldwide consumers. This results in massive store traffic and adds more and more revenues to the company's Valentino UK top line.
Shareholders' ReturnsMichael Kors does not pay any dividends, so investors' return relies solely on share price appreciation. Investors in the stock have been very well rewarded since their investments have been tripled in just 2 years. During the previous year, this stock experienced an upward movement of 65%, whereas Coach (NYSE:COH) experienced a 2.80% decline in share price. Michael Kors climbed up to $57.10 a year ago and is currently at $94.22. The stock recorded a 22.89% rise in share price after the company reported spectacular performance during the quarter Valentino UK Online that ended December 28, 2013. In premarket trading Michael Kors' shares crossed the $90 level reaching an alltime high share price at open.