Michael Kors beats by $0.03, beats on revs; guides Q3 EPS in-line, revs above consensus; guides FY14 EPS in-line, revs in-line
Reports Q2 (Sep) earnings of $0.71 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.68; revenues rose 38.9% year/year to $740.3 mln vs the $727.3 mln consensus. Retail net sales increased 46.8% to $355.6 million driven by a 22.9% increase in comparable store sales and 83 net new store openings since the end of the second quarter of fiscal 2013. Wholesale net sales increased 29.9% to $351.9 million and licensing revenue increased 65.4% to $32.9 million. Licensing segment, revenue increased 65%, driven primarily by the strength in watches and eyewear. Sales in North America grew 31% and comparable store sales increased 21%, driven by strength across accessories and watch offerings and strong consumer response to jet-set in-store experience. North America wholesale segment growth driven by accessories and footwear categories as well as the continued sales lift from shop-in-shop conversions in department stores. In Europe, sales grew 101% in the second quarter, as brand awareness continued to drive comparable store sales growth of 45%. Gross profit increased 42.4% to $449.9 million, and as a percentage of total revenue increased to 60.8% compared to 59.3% in the second quarter of fiscal 2013. Co issues mixed guidance for Q3, sees EPS of $0.83-0.85, excluding non-recurring items, vs. $0.85 Capital IQ Consensus Estimate; sees Q3 revs of $845-855 mln vs. $843.42 mln Capital IQ Consensus Estimate. This assumes a comparable store sales increase in the range of 15% to 20%.
Co issues in-line guidance for FY14, sees EPS of $2.77-2.81, excluding non-recurring items, vs. $2.77 Capital IQ Consensus Estimate; sees FY14 revs of $2.9-3.0 bln vs. $3 bln Capital IQ Consensus Estimate.