Annual revenues at Michael Kors jump 32 percent

Wednesday, 27 May 2015
REPORT Michael Kors Holdings for the fourth quarter ended March 28, 2015 reported total revenue increase of 17.8 percent to 1.1 billion dollars from 917.5 million dollars in the fourth quarter of fiscal 2014. On a constant currency basis, total revenue increased 23.3 percent. Total  revenue for the year increased  32 percent to 4.4 billion dollars from 3.3 billion dollars in fiscal 2014. On a constant currency basis, total revenue increased 34.3 percent.


Retail net sales in the fourth quarter increased 14.9 percent to 469.4 million dollars driven by 121 net new store openings since the end of the fourth quarter of fiscal 2014 and e-commerce sales from the recently launched US e-commerce site, partially offset by a 5.8 percent decrease in comparable store sales. On a constant currency basis, retail net sales grew 21.1 percent, and comparable store sales decreased 1.7 percent. Wholesale net sales increased 20.4 percent to 570.4 million dollars and on a constant currency basis, wholesale net sales grew 25.8 percent. Licensing revenue increased 16.5 percent to 41.3 million dollars.

Total revenue in North America for the fourth quarter increased 13.7 percent to 840.5 million dollars, with a 6.7 percent decrease in comparable store sales. On a constant currency basis, revenue in North America grew 14.3 percent, with a 5.8 percent decrease in comparable store sales. European revenue grew 33.5 percent to 219.8 million dollars, with comparable store sales decreasing 5.6 percent. On a constant currency basis, revenue in Europe grew 59.5 percent, with an 11 percent increase in comparable store sales. Revenue in Japan increased 42.7 percent, with comparable store sales growth of 12.4percent. On a constant currency basis, revenue in Japan grew 65 percent, with a 30 percent increase in comparable store sales.

Gross profit for the quarter increased 14.8 percent to 630.8 million dollars, and as a percentage of total revenue was 58.4 percent. Net income was 182.6 million dollars, or 0.90 dollars per diluted share. At March 28, 2015, the company operated 526 retail stores, including concessions, compared to 405 retail stores, including concessions, at the end of the same prior-year period. The company had 202 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 728 Michael Kors stores worldwide at the end of the fourth quarter of fiscal 2015.

“Fiscal 2015 marked another year of sales and earnings growth in excess of 30 percent. While we were faced with a number of headwinds in the fourth quarter, we were pleased with the strong performance across our segments and geographies. We plan to expand upon our ready-to-wear and footwear categories and fully develop our global men’s business. In addition, we plan to capitalize on wearable technology in watches and other categories, as innovation and demand in this area continue to advance. We expect to deliver accelerated and sustainable earnings growth,” said John D. Idol, the company’s Chairman and Chief Executive Officer.

For the fiscal year ended March 28, 2015, retail net sales increased 34 percent to 2.1 billion dollars and comparable store sales increased 10.3 percent. On a constant currency basis, retail net sales grew 36.7 percent, and comparable store sales increased 11.9 percent. Wholesale net sales increased 30.9 percent to 2.1 billion dollars and on a constant currency basis, wholesale net sales grew 33 percent. Licensing revenue increased 22.4 percent to 171.8 million dollars. Gross profit for the year increased 31.3 percent to 2.6 billion dollars, and as a percentage of total revenue was 60.6 percent. Net income for the year was 881 million dollars, or 4.28 dollars per diluted share.

For the first quarter of fiscal 2016, the company expects total revenue to be in the range of 930 million dollars to 950 million dollars. On a constant currency basis, total revenue is expected to increase in the high single digit range and a low double digit comparable store sales decrease on a reported basis and a mid-single digit decrease on a constant currency basis. Operating expense as a percentage of total revenue is expected to increase 550 to 600 basis points. Diluted earnings per share are expected to be in the range of 0.74 dollars to 0.78 dollars.

For fiscal 2016, the company expects total revenue of approximately 4.7 billion dollars to 4.8 billion dollars. On a constant currency basis total revenue is expected to increase in the low to mid-teens range and flat comparable store sales on a reported basis, and a low single digit comparable store sales increase on a constant currency basis. Operating expense as a percentage of total revenue is expected to increase 110 to 140 basis points. Diluted earnings per share are expected to be in the range of 4.40 dollars to 4.50 dollars for fiscal 2016.

Related News