Tag Archives: Michael Kors

The sales for clothing and footwear in Europe and North America will fall from more than 50 percent of the global market in 2017 to less than half in 2018

The luxury goods industry has faced a number of changes over the past two decades. Michael Kors is one of them. Kors have suffered some missteps and weakening demand as it tried to straddle the luxury and affordable accessories categories.

In order to reinstate it`s cache it started offering fewer online promotions, closed down underperforming stores and began innovating on new product lines which includes men`s footwear.

Kors is investing heavily in digital platforms in order to offer a more seamless customer experience at a time when online buying continues to expand.

 

 

International growth is anticipated to grow. Especially with acquisitions of brands such as Jimmy Choo. Credit Suisse reiterates an outperform rating on Michael Kors in front of the retailer`s FQ1 update.

«Our checks suggest F1Q trends were stable or slightly better than F4Q,» Credit Suisse writes.

The supply chain and retail network for the luxury goods industry have spread globally. However, Europe and the US have continued to account for a disproportionate share of sales. Although historically the industry has operated on a «West versus the Rest» basis, recent trends underline the growing importance of Asia, the Middle East, Latin America and Africa.

The sales for clothing and footwear in Europe and North America will fall from more than 50 percent of the global market in 2017 to less than half in 2018, while sales in Asia, Latin America, the Middle East and Africa combined will rise above 50 percent and continue to increase in subsequent years.

Most industry observers attribute this development not just to growing sales in emerging markets but also to innovative retail concepts and business models adopted in these regions.

The growing importance of non-western markets for the luxury goods industry has been supported by supply chain leadership, technological innovation and international investment. These factors will help maintain further strong growth in these geographical markets.

Italy is once again the leading luxury goods country in terms of the number of companies, while France has the highest share of sales.

China, France, Germany, Italy, Spain, Switzerland, the UK and the US together made up 83 percent of the Top 100 luxury goods companies and 90 percent of Top 100 luxury goods sales.

Cosmetics and fragrances was the top-performing sector in 2016, and the only sector with improving composite luxury goods sales growth, at 7,6 percent. Collectively, millennials and Generation Z will represent more than 40 percent of the overall luxury goods market by 2025, compared with around 30 percent in 2016.

Kors latest fashion is their exclusive graffiti print which celebrates street art and its influence on fashion. Inspired by 1980s New York, their new black and white graffiti print puts a graphic spin on todays fashion favorite jackets, shoes and bags.

Kors is still a solid company and a strong increase in store renovations will be rolled out more aggressively over the next few years. In addition, the company wants to expand Jimmy Choos store network, increasing the number of stores from 185 today to about 250.

Michael Kors Holdings Limited is expected to report earnings on Wednesday August 8, 2018 before the open, and the report will be for the fiscal Quarter Jun 2018. The consensus EPS forecast for the quarter is 1, which is 6 percent higher than Wall Street.

Revenues are also expected to come in higher at 1,16B as compared to the sell sides consensus of 1,14B. YoY EPS and revenue growth are expected to come in healthy at 25 percent and 22 percent respectively.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Michael Kors opened 34 new stores last quarter while foot traffic are declining

Michael Kors peaked in early 2014 and have since then declined in month after month. The stock is trading at about $42 on the last day of May 2016. The outlook for luxury goods has been very disappointing and it still is.

It seems like the consumer spending has been transitioning away from luxury goods to technology and experiences such as food and travel. Michael Kors is a strong brand and still has a strong appeal to the consumers, but the luxury space is struggling to come back.

 

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Long investors think this is a short blip and that the stock will come back, but many people out there belive what we see right now is the new normal. The market for luxury goods have been very disappointing so far this year.

British luxury brand Burberry has declined, and they blame on weak demand in Hong Kong and a drop in tourist spending in Europe. Gap Inc is not better, and their performance can be an indication of incredible softness in the retail industry worldwide.

Nordstrom is also removing Michael Kors handbags from its stores at a rapid space, according to a report from Wedbush. Managers at Nordstrom said declining interest from shoppers for MK products led to the decision.

Not only that. Macys is offering discounts on MK handbags due to oversupply. Furthermore, both Nordstrom and Macys reported weak Q1 earnings due in part to a drop in foot traffic at stores. Just like last year, 2016 will be a challenging year for luxury goods.

Luxury goods sales are expected to rise about 3,5%, from $317 billion to $328 billion.

So far this year, we have also seen losses from luxury retailer Tiffany`s, setting the stage from weakness from Michael Kors, Vera Bradley, and Lululemon over the next week. In an effort to drive top line growth, MK has focused on opening new stores.

Last quarter the company opened 34 new stores, consisting of 15 in the United States and the rest in International markets.

While the new stores will increase operating costs and contract margins, they should help generate higher revenue in the near term.

Global stores should continue to see adverse impacts from weak currency conditions. Regardless, MK continue to deliver positive growth in key financial metrics including revenue, net sales, profits and net income.

The Estimize consensus is calling for earnings of 98 cents per share on $1,156 Billion in revenue, 2 cents higher than Wall Street on the bottom line and right in line on the top. Since the holiday season earnings estimates have fallen 3% while revenue has dropped only 1%.

Year over year comparisons are now projecting a 9% increase in profitability with sales anticipated to grow 11%.

Michael Kors is expecting to report on June 1, before the open.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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