Michael Kors’s 3Q18 results
Michael Kors (KORS) delivered strong fiscal 3Q18 results. Michael Kors recorded revenue growth of 6.5%—compared to the same quarter last year. Total sales stood at $1.44 billion—$60 million more than the consensus expectations and ~$55 million more than the upper end of management’s guidance.
“We are pleased with our third quarter performance, which delivered better than expected results and saw the successful integration of Jimmy Choo into our luxury group. The Michael Kors brand continued to make progress on Runway 2020 initiatives across product innovation, brand engagement and customer experience. Our innovative fashion luxury product offerings for the holiday season created excitement among consumers,” said John D. Idol, Michael Kors’s chairman and CEO.
Competitor Tapestry (TPR), the owner of Coach and Kate Spade, reported its results the day before Michael Kors. Tapestry posted a 35% YoY increase in sales to $1.78 billion due to organic growth and the recent acquisition of Kate Spade. Tapestry outdid consensus expectations by $20 million.
What drove Michael Kors’s 3Q18 top line?
The improvement in Michael Kors’s 3Q18 top line was driven by the revenue contribution from the Jimmy Choo acquisition, which accounted for $115 million of Michael Kors’s total sales.
For the Michael Kors brand, revenue fell 2% during the quarter. The decline was driven by a 9% fall in wholesale sales, which completely washed away the 1.1% rise in retail sales. In the next part, we’ll discuss the key revenue drivers for the quarter.
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