Michael Kors (KORS) reported its earnings on February 2, 2016. It sent the company’s stock 24% higher. The earnings beat Wall Street analysts’ estimates by quite a margin. The company reported an EPS (earnings per share) of $1.59. Wall Street analysts estimated the EPS to be around $1.46. This was a substantial surprise of 9.0%. The company’s revenue rose by 6.3% to $1.4 billion from $1.31 billion in 3Q15. This was taken as a sign of reviving growth.
In 3Q16, the company’s net income was $294.6 million. When it’s compared to 3Q15, it fell by 3.0% due to foreign exchange headwinds and higher operating expenditure. However, it still managed to be above Wall Street analysts’ expectations of $273.5 million due to higher sales.
International business drove 3Q16 results
Michael Kors’s 3Q16 results were driven by the company’s better-than-expected performance in international regions like Europe and Japan. The e-commerce platform also drove the company’s top line. In 3Q16, the total sales in Europe grew by 14.3%. This included growth in both retail and wholesale. In contrast, the total sales in Japan grew by 59.0%.
The company’s CEO, John Idol, stated in the conference call that he sees a lot of penetration opportunities in Europe and Asia. The company will be moving to tap that in the future. We’ll dig deeper into the company’s performance in this series.