Michael Kors (KORS) earnings easily beat fiscal second-quarter views, but sales at the rising luxury fashion house failed to impress investors Wednesday morning. Michael Kors stock crashed before the open.
Michael Kors Earnings
Estimates: Analysts expected Michael Kors earnings to slide 18% to $1.09 as revenue is seen growing 10.5% to $1.27 billion.
Results: Earnings dipped to $1.27 a share. Sales grew to $1.25 billion, slightly missing. Same-store sales were down 2.1%, more than expected. Sales at European retail stores fell nearly 10%.
Michael Kors Stock Technical Analysis
Shares crashed nearly 15% to 49.05 in the stock market, a 52-week low. Michael Kors stock plunged 8.2% on Sept. 24 on news that the the company was close to a deal to acquire iconic Italian fashion label Versace.
Kors made the Versace announcement official the next day, and said it would change its name to Capri Holdings. That follows the 2017 acquisition of luxury shoemaker Jimmy Choo for $1.2 billion.
Michael Kors stock continued to fall, hitting a then-51-week low of 53.66 on Oct. 30. The relative strength line has been at a 52-week low.
Michael Kors Couture?
With Choo and Versace now under its belt, Michael Kors appears to be building a fashion conglomerate in the style of Dior and Sephora parent LVMH (LVMUY) or Gucci parent Kering. It also looks to be an entree into the higher-end world of runway couture vs. the affordable luxury that Kors currently sells.
Last week, Coach and Kate Spade parent Tapestry (TPR) beat Q1 expectations on the top and bottom lines with 14% EPS growth and 7% sales growth to 48 cents and $1.38 billion, respectively. The flagship Coach brand led growth, while Stuart Weitzman dragged on results.
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