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Michael Kors' same-store sales fall less than expected
[BENGALURU] Michael Kors Holdings Ltd's reported a much smaller-than-expected drop in same-store sales for the holiday quarter during which the luxury goods maker sharply cut promotions to reinvigorate sales and brand prestige.
Shares of the company, which also raised its full-year sales forecast, were up nearly 8 per cent in trading before the US market opened on Wednesday.
Kors said same-store sales fell 3.2 per cent in its third quarter ended Dec 30, well below analysts average estimate of a decline of 6.8 per cent, according to Thomson Reuters I/B/E/S.
Once the hottest name in affordable luxury, Kors made its products available more widely and relied on promotions to boost sales as people increasingly shopped online for sale.
But that led to a year-long decline in revenue, which ended last quarter as Kors limited supplies to department stores and off-price channels, refreshed its product lines and shut underperforming stores.
Kors had said it would cut promotions for the holiday season by 67 days at department stores and off-price channels and by nearly two-thirds at its stores and website.
That helped Kors's total revenue rise for the second quarter in a row - 6.5 per cent to US$1.44 billion - also helped by two months of sales for Jimmy Choo, the high-end shoemaker it bought last year.
Jimmy Choo contributed US$114.7 million in revenue.
The boost from Jimmy Choo helped the company raise its full-year revenue forecast to US$4.66 billion from US$4.59 billion.
Net income attributable to Kors fell to US$219.4 million, or US$1.42 per share, from US$271.3 million, or US$1.64 per share, due to higher costs and a rise in the tax rate.
Excluding one-time items, the company earned US$1.77 per share, beating analysts' estimates of US$1.29.