- Prachi Singh |
REPORT_ Michael Kors Holdings announcing its financial results for the second quarter ended September 27, 2014 said that its total revenues increased 42.7 percent to 1.1 billion dollars from 740.3 million dollars in the second quarter offiscal 2014. Retail net sales increased 39.4 percent to 495.6 million dollars driven by 121 net new store openings since the end of the second quarter of fiscal 2014 and a 16.4 percent increase in comparable store sales.
For the first six months ended September 27, 2014, total revenues increased 43.1 percent to 2 billion dollars from 1.4 billion dollars in the same period of fiscal 2014. Retail net sales increased 43.2 percent to 975.8 million dollars. Comparable store sales increased 20.2 percent. Wholesale net sales increased 43.3 percent and licensing revenue increased 37.6 percent. Gross profit for the first six months increased 43.6 percent and as a percentage of total revenue increased to 61.6 percent as compared to 61.3 percent in the same period of fiscal 2014.
Commenting on the financial development, John D. Idol, Chairman and Chief Executive Officer, said, “Our strong second quarter results reflect our fashion leadership, aspirational product offering and jet-set luxury image that continue to resonate with customers globally. Once again, we delivered exceptional performance with both revenue and earnings per share growth in excess of 40 percent. This ongoing momentum reflects strength across our operating segments and geographies as we continue to expand our presence globally.”
Wholesale net sales increased 46.1 percent to 514.1 million dollars and licensing revenues increased 42.8 percent to 46.9 million dollars. Revenue in North America increased 29.8 percent to 802.2 million dollars, with a 10.8 percent increase in comparable store sales. European revenues grew 108.6 percent to 237.9 million dollars, with comparable store sales increasing 41.1 percent. Revenue in Japan increased 106.3 percent to 16.5 million dollars, with comparable store sales growth of 52.9 percent. Gross profit increased 43.4 percent and as a percentage of total revenue increased to 61 percent compared to 60.8 percent in the second quarter of fiscal 2014.
At September 27, 2014, the company operated 473 retail stores, including concessions, compared to 352 retail stores, including concessions, at the end of the same prior-year period. The company had 176 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 649 Michael Korsstores worldwide at the end of the second quarter of fiscal 2015.
The company also announced that it will take direct control of the Michael Kors business in South Korea from its current partner, Simone FC, by the early part of calendar 2016. The current distribution in this region includes 37 locations. The company will focus on building the infrastructure and developing its expansion strategy for South Korea in order to position this business for long term growth.
For the third quarter of fiscal 2015, the company expects total revenue to be in the range of 1.27 billion dollars to 1.30 billion dollars. This assumes a low double digit comparable store sales increase. Diluted earnings per share are expected to be in the range of 1.31 dollars to 1.34 dollars for the third quarter of fiscal 2015. For fiscal 2015, the company now expects total revenue to be in the range of 4.3 billion dollars to 4.4 billion dollars. This assumes a comparable store sales increase in the mid-teens. Diluted earnings per share are now expected to be in the range of 4.13 dollars to 4.18 dollars for fiscal 2015.