Snapshot of the series
Michael Kors (KORS) stock has been surging ever since the company announced its first-quarter 2019 results on August 8. KORS cruised well ahead of both the top-line and bottom-line expectations during the quarter and also raised its earnings guidance for the full fiscal year. As a result, its stock price increased 6.7% on August 8 and another 3.3% on the next trading day.
Adjusted earnings per share stood at $1.32, which was $0.37 more than estimates. Total sales increased 26.3% YoY (year-over-year) to $1.21 billion, beating the consensus by $70 million. The results relate to the three-month period ended June 30, 2018.
Read part two and three of this series to know more about the company’s performance in the first quarter. Read part four for a view of the revised fiscal 2019 guidance, recent stock price movement, and analyst action on the company after Q1 results.
KORS is currently trading at a one-year forward price-to-earnings (or PE) ratio of 14.3x versus a three-year average of 11.1x. It is, however, trading at the middle of its 52-week PE range of 11.2x to 17.3x.
Rival Tapestry (TPR) continues to be slightly expensive and is valued at 17.2 times the next-12-month earnings. Other apparel and accessories stocks are also trading at a premium to KORS. PVH (PVH), V.F. Corp (VFC), and Ralph Lauren (RL), for instance, are currently valued at 16.6x, 25.7x, and 20.5x, respectively.
About Michael Kors
Established in 1981, Michael Kors is a luxury fashion brand that designs and sells handbags, apparel, and fashion accessories. The company operates close to 850 retail stores, including concessions, in more than 100 countries.
In July 2017, KORS announced the acquisition of Jimmy Choo for $1.2 billion. Jimmy Choo is a premier luxury footwear and accessories brand with a strong presence in Europe, Asia, and North America.
ETF investors seeking to add exposure to KORS can consider the iShares Edge MSCI Multifactor Consumer Discretionary ETF (CNDF), which invests 2.3% of its portfolio in the company.