US: Michael Kors Q3 profit soars on rising sales
- Q3 profit more than doubles to $130m
- Revenues jumped 70.4% to $636.8m
- Gross margin improved to 60.2%
US-based luxury clothing brand Michael Kors is lifting its full-year earnings guidance after more than doubling its third-quarter profit on the back of rising sales and new store growth.
Net income reached US$130m for the three months to 29 December, up from $39m the same period the prior year.
Total revenue surged 70.4% to $636.8m from $373.6m the prior year. Retail net sales increased 66.8% to $332.6m, driven by a 41.4% jump in comparable store sales and 66 new store openings since the end of the comparable third-quarter.
Wholesale net sales rose 77.4% to $274.3m and licensing revenue was up 52.1% to $29.8m. Gross margin improved to 60.2% against 59.4% the year before.
Chairman and CEO John Idol said: "Our strong third quarter performance reflects sustained brand momentum as the global recognition and appeal for the Michael Kors luxury brand continued to expand. Moreover, we were extremely pleased with the holiday season as Michael Kors' brand strength, innovative fashion design and jet-set in-store experience drove strong sales and earnings."
Looking ahead, the company expects fourth-quarter diluted earnings per share to range from $0.32 to $0.34 and revenues to be between $515m and $525m.
Full-year diluted earnings per share are estimated to range from $1.80 to $1.82, compared to its earlier guidance of $1.48-$1.50. Revenues are forecast to reach $2.1bn against its earlier guidance of between $1.86bn to $1.96bn.
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