SA News • Tue, Nov. 18
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- Although KORS beat the analysts' estimates in its fiscal Q2 by a wide margin, the stock has declined 12% since the report.
- As the company has exhibited excellent performance, the pronounced decline of its stock this year is due to a great reduction of the P/E ratio the market assigns to it.
- The article analyzes the reasons for the great reduction in the P/E of the stock.
- Michael Kors reported fiscal Q2 2015 earnings and revenue ahead of estimates.
- Comparable sales growth in North America was disappointing as well as the fiscal Q3 and full-year guidance for comp growth is lower than expected.
- Ramped-up investment cycle is causing a contraction in operating margins.
- High growth, continued expansion, international growth opportunities and the announced buyback should bring balance and may lead to a sustainable bottom in the next couple of weeks.
- I am upgrading Kors back to buy.
Let's Put Michael Kors' 'Disappointing' Quarter In Perspective
- A realistic analysis of KORS Q3 without Wall Street expectations.
- KORS valuation multiple is now cheaper than inferior companies like COH and RL.
- The reason that KORS stock has fallen, and its multiple has fallen.
Update: Michael Kors Fiscal Q2 Earnings Solid But Investors Concerned
- KORS beat consensus on the top and bottom lines.
- We felt that KORS would continue to see weakness as the markdowns appeared to continue to rise.
- We are still bearish on KORS and prefer COH.
Coach Or Michael Kors: Which Luxury Retailer Posted Stronger Quarterly Results?
- Coach reported Q1 earnings on October 28.
- Michael Kors reported Q2 earnings on November 4.
- Both companies exceeded analysts' expectations.
- Both stocks have reacted by making moves to the downside.
- The market overreacted to slowing same store sales and lower guidance.
- The company posted phenomenal results in its latest report and is still a growth story.
- Michael Kors also announced a $1 billion stock repurchase.
- After an 8% drop, the company compares favorably to its peers using multiple metrics.
- Shares are on sale. I believe the stock reaches $80 by year end and $100 by year-end 2016.
- Michael Kors delivered Q2 2015 revenues of $1.056 billion and earnings of $1.00 per share, well above guidance and analyst estimates.
- I had pointed out that Michael Kors's guidance was historically quite conservative and expected it to do much better than its guidance. The results were still better than my expectations.
- Q3 2015 guidance is being portrayed as light. However, that guidance probably is conservative on revenues by 7% to 8% given past history.
- North American retail sales growth is slowing down, but wholesale sales and international sales are more than compensating for that so far.
Michael Kors: Aspirational Brand Commands More Pedestrian Valuation
- Kors More Affordable, But Less Compelling.
- Insider Selling Validated, in Our View.
- We Prefer Coach.
Update: Michael Kors Reports Q2 2015 Results, Beats Estimates
- Michael Kors reported revenue growth of 43% yoy (comps growth of 16.4% yoy).
- The company's revenues grew by double digits in all regions, relative growth has been strongest in its International markets.
- In my original article I had forecasted ongoing growth and came to the conclusion that Michael Kors was undervalued.
- This quarter made me reiterate my original conclusion: Michael Kors' great growth outlook justifies a much higher price.
- Michael Kors beat earnings and revenue estimates in Q2 FY15, but shares have fallen more than 7% today.
- Michael Kors offered poor Q3 guidance in relation to same store sales, and this poor guidance is a primary driver for the sell-off today.
- We originally set a price target for KORS of $120, and given our forecasts are in line with management outlook, we still affirm this $120 price target.
- Considering the contradiction of recent weakness and strong earnings results, we recommend KORS as a must-buy today.
Update: Michael Kors Shares Tank On Earnings Announcement As Expected
- The company has grown too fast and is becoming a victim to the discounting and tough environment affecting other retailers.
- The company’s comparable store sales rose less than expected and margins are declining.
- Extensive insider sales of KORS shares since their initial public offering by company founders and top executives are a strong warning sign.
- The company's announced billion dollar buyback will prove ineffective in propping up the company's share price in the intermediate term.
Michael Kors Exceeds Q2 Expectations And Announces $1 Billion Repurchase Authorization, Shares Fall
- Q2 earnings were released before the market opened on November 4.
- Earnings per share and revenue came in above expectations.
- The stock has reacted by falling more than 8%.
- The stock now sits more than 25% below its 52-week high.
Will Record Q2 Results Help Push Michael Kors Back Towards Its Highs?
- The company has exceeded EPS and revenue expectations for 11 consecutive quarters.
- Q2 earnings will be released on November 4.
- Analysts currently anticipate growth of more than 20%.
- The stock is down over 7% year-to-date.
- Michael Kors is one of the hottest brands in specialty retail right now, posting double-digit growth in topline each quarter in the past two fiscal years.
- Quick social media perusing reveals Michael Kors is a very valued and in-demand brand.
- Expecting continued growth in revenue heading into FY 16, we set a price target of $120.
- Michael Kors has shown astonishing growth over 5 year period.
- It continues to beat competitors in its field.
- The sell-off led by insiders has dropped share price to attractive levels.
For The First Time, I Bought A Stock That Doesn't Pay A Dividend - Here's Why
- As a devoted income investor, a dividend has always been mandatory for me to consider purchasing a stock.
- However, there is one stock that doesn't pay a dividend, but is too tantalizing an opportunity to pass up.
- This stock will grow EPS by 24% this year and trades for just 18 times current fiscal year EPS estimates, and just 16 times forward EPS.
- Coach is a classic luxury brand built around the timeless concepts of quality, beauty, elegance, and sophistication.
- Michael Kors is basically a "flavor of the month" trend-chasing copycat, built around a reality show star.
- COH is the better choice for long-term investors.
- The sale of shares from the largest shareholder has resulted in the price fall over the last few weeks.
- The growth in the revenues and earnings remains strong for the company and Asia, Europe and North America are recording solid growth.
- Growth prospects from the emerging markets are extremely attractive as the spending on luxury goods is increasing in these markets.
- Margins of the company are extremely attractive and future growth prospects should allow it to maintain its margins.
- The recent weakness in the stock price has created an opportunity for the long-term shareholders to add to their positions.
- Michael Kors is still growing at a fast pace.
- Michael Kors' valuation and fundamentals indicate that the company can deliver more upside.
- Michael Kors is expanding its base across the world with different store concepts.
- Michael Kors is improving its product mix to attract more customers.
Michael Kors: Anxiety Is Premature - The Company Is At A Critical Stage
- Industry trends favor Michael Kors' success in Europe and Asia.
- Michael Kors has the best talent for becoming a global diversified company.
- The product line expansion will open up an opportunity to sustain high growth while reducing the risks of brand dilution.
- A 30% upside from the current price is achievable even under conservative growth rates and profit margin contraction.
Tue, Nov. 18, 10:18 AM
- Piper Jaffray comes up with an eclectic mix as part of its five best retail stock picks for the holiday season.
- Best Buy (NYSE:BBY): A strong electronics lineup this year bodes well for Best Buy. Ultra HD 4K TVs, iPhone 6s, and GoPro products top many wish lists.
- Coty (NYSE:COTY): A focus on color cosmetics sets up Coty for market share gains this holiday season.
- Del Frisco's Restaurant Group (NASDAQ:DFRG): A bounce in consumer and business expense spending should help this high-end dining name, says Piper.
- Michael Kors (NYSE:KORS): The MK brand is as hot as ever. Consumers in a survey by Piper ranked it as the top fashion brand.
- Nordstrom (NYSE:JWN): The department store operator's best in-class e-commerce operation stands out.
Wed, Nov. 12, 10:37 AM
- Select high-end retailers are in rally mode after Fossil (FOSL +7.3%) cruises past Q3 estimates.
- The strong demand that Fossil saw for higher-priced items bodes well for the sector, say analysts.
- Advancers: Movado (NYSE:MOV) +1.1%, Michael Kors (NYSE:KORS) +1.6%, Coach (NYSE:COH) +1.6%, Vera Bradley (NASDAQ:VRA) +1.1%.
Thu, Nov. 6, 1:27 PM
- Apparel seller Ann issued a warning today on the impact of labor uncertainty at West Coast ports as part of its Q4 guidance.
- The retailer expects $8M in extra air freight costs due to product shipment delays.
- There's also been some reports of delays at ports in the Seattle and Tacoma area which account for 16% of container cargo traffic on the West Coast.
- Analysts fret that more companies will resort to air freight to ensure stores are stocked in front of the Black Friday rush.
- Apparel and footwear stocks: SKX, FL, VRA, ICON, NKE, WWW, DECK, CROX, SHOO, BWS, KATE, ANN, PERY, LULU, RL, PVH, VNCE, CRI, UA, HBI, VFC, COLM, KORS, GIL, SQBG, JCP, KSS, DDS, M, JWN, RL.
Wed, Nov. 5, 12:22 PM
- Shares of Michael Kors (KORS +2.4%) have bounced back a bit after yesterday's post-earnings swoon.
- Some analysts think the North America same-store sales miss (11% vs. 15% expected) is due to a warmer start to the fall selling season, while others see mall traffic in a downward spiral which impacts even red-hot sellers like MK.
- An interesting note nearly lost amid yesterday's earnings information gush is that the company plans to relocate its corporate HQ to Hong Kong from London.
- Previously: Michael Kors beats by $0.11, beats on revenue, Investors not buying Kors beat as holiday guidance is sluggish
Tue, Nov. 4, 9:15 AM
Tue, Nov. 4, 8:38 AM
- FQ2 net income of $207M or $1 per share vs. $145.8M and $0.71 one year ago.
- Comp store sales up 16.4% Y/Y. Retail net sales of $495.6M up 39.4% amid 121 net new store openings over the last year.
- North America revenue of $802.2M up 29.8% Y/Y with 10.8% increase in comp sales; Europe up 108.6% to $237.9M with 41.1% increase in comp sales; Japan up 106.3% to $16.5M with 52.9% increase in comp sales.
- Gross profit of $645M up 43.4%; as a percentage of revenue, gross profit of 61% up 20 bps Y/Y.
- $1B share repurchase program over two years is authorized.
- Guidance: FQ3 revenue of $1.27B-$1.3B, assumes low double-digit comp store sales. EPS of $1.31-$1.34. The Street is at $1.3B and $1.34.
- Full-year fiscal 2015 revenue of $4.3B-$4.4B assumes comp sales growth in the mid-teens. EPS expected at $4.13-$4.18.
- Previously: Michael Kors beats by $0.11, beats on revenue
- Conference call is underway live on Seeking Alpha
- KORS -9.1% premarket
Tue, Nov. 4, 7:08 AM
Mon, Nov. 3, 5:30 PM
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Wed, Oct. 29, 10:32 AM
Wed, Oct. 1, 8:53 AM
- Morgan Stanley digs down into sales trends at Michael Kors (NYSE:KORS) after fears of a heightened level of promotions at the retail chain impacted shares over the past week.
- Store checks by the investment firm found the same level of discounting by Michael Kors as it has recorded before without gross margin compression.
- Analyst Kimberly Greenberger says the path to $6.00 EPS by 2016 for MK is still clear.
- KORS +0.2% premarket
Wed, Sep. 24, 8:13 AM
- Retail sales could increase by 4.5% to $986B this holiday season on an improved macroeconomic backdrop, forecasts Deloitte Touche.
- The mark would easily top last year's 2.8% rise.
- Online sales are tipped to rise by 14%.
- Promotional activity across broad retail has been dialed back a touch during the back-to-school season, but is still a risk to margins heading into the crucial shopping period.
- What to watch: This holiday season could be an operational pressure cooker for UPS (NYSE:UPS) and FedEx (NYSE:FDX) with demand expected to be high.
- Related stocks: AAP, AEO, ANF, BBBY, BBY, BJ, CHS, COH, COST, DG, FDO, FL, GPS, JCP, JNY, JWN, KSS, LB, LULU, M, NDN, PIR, RL, TGT, TIF, TJX, UA, URBN, VFC, WMT, ZLC, PERY, SQBG, VNCE, KORS, GIII, KATE, GIL, VRA, ICON, PSMT, AMZN.
- Related ETFs: XLY, XRT, VCR, RTH, RETL, IYK, FXD, FDIS, PMR, UGE, RCD, SZK
Fri, Sep. 5, 8:25 AM| 6 Comments
Fri, Aug. 29, 7:12 AM
- The luxury group continues to show sizzling sales growth, aided by the price increases high-end sellers have pushed through to consumers.
- SA contributor Valuentum thinks the luxury space will remain resilient due to the brand equity and pricing power in the sector.
- Though Tiffany (NYSE:TIF) impressed with its smashing Q2 earnings report, Valuentum sees more value in aspirational handbag maker Coach (NYSE:COH) with its strong financial position and potential to turn around its North American business.
- Valuentum interview on CNBC
- Related stocks: KORS, OTCPK:LVMUY, OTC:GUCG, OTCPK:BURBY, OTCPK:CFRUY, OTCPK:LVMUY.
Mon, Aug. 4, 10:38 AM
- Shares of Coach (COH +0.9%) are higher following the FQ1 report from Michael Kors (KORS -7.4%).
- Sales were strong at MK, although the company's rapid increase in inventory and slight margin compression are drawing some notice from investors.
- Coach will have at its turn at the earnings plate tomorrow as it attempts to break a streak of EPS misses.
Mon, Aug. 4, 7:22 AM| 24 Comments
Mon, Aug. 4, 7:08 AM| Comment!
KORS vs. ETF Alternatives
Michael Kors Holdings Ltd Michael Kors Holdings Ltd is a designer, marketer, distributor and retailer of women's apparel and accessories and men's apparel. The Company's business consists of retail, wholesale and licensing segments.
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