Michael Kors Holdings Ltd. is reaping the rewards of a robust refresh of its core brand as well as its recent acquisition of Jimmy Choo.
The firm today reported a 6.5 percent rise in third-quarter revenues, to $1.44 billion, including a $115 million contribution from Jimmy Choo, which was in Kors’ stable for just two months during the period. Those results handily topped forecasts for revenues of $1.38 billion.
Overall, adjusted profits edged up 0.7 percent over the prior year to $273.4 million, or $1.77 per diluted share, blowing past analysts’ bets for earnings per diluted share of $1.29. On a reported basis, net income fell 19 percent year-over-year, to $219.4 million, or $1.42 per share.
Michael Kors chairman and CEO John Idol said the better-than-anticipated results were driven by higher revenue at both the Michael Kors brand Jimmy Choo as well as improved gross margin and lower expenses.
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“Our solid financial performance reflects the continued progress we are making on our Runway 2020 strategic plan,” Idol added, referring to the firm’s long-term strategy to premiumize the Michael Kors brand.
“We continue to increase the level of fashion innovation and layering across our [Michael Kors’] assortments,” he added, noting that the firm has successfully completed the integration of Jimmy Choo.
Powered by the momentum of a significant third-quarter earnings beat, the company raised its full-year outlook and now expects total revenues of $4.66 billion, including between $225 million and $230 million of incremental revenue from Jimmy Choo. Comparable sales for the Michael Kors brand are expected to decline in the mid-single digits. Diluted earnings per share are forecast to be in the range of $4.40 to $4.45, with no incremental impact from Jimmy Choo.
As of 12:30 p.m. ET, the firm’s shares were up 3.6 percent to $67.76.
