Michael Kors stock up 13 percent on solid revenue

American designer Michael Kors in about to enter the Olympus of fashion billionaires as his eponymous company Michael Kors Holdings Ltd (KORS.N) raised its full-year forecast after strong sales of its luxury items sent its shares to a record

high. The stock rose as much as 13 percent to 64.80 dollars on the New York Stock Exchange on Tuesday.

The stock has more than tripled since Michael Kors went public in December 2011 at 944 million dollars. Today, the company has a market capitalisation of 12.6 billion dollars.

Now, and according to SEC filings, Kors owns stock and options worth more than 485 million dollars after the surge, reported ‘Forbes’. The designer held a 3.7 percent stake in the company as of December 31, so at Tuesday’s share price, this stake would be worth around 466 million shares.

The company surpassed all expectations on Tuesday when reported a 70 percent hike in quarterly revenue to 637 million dollars. Wall Street’s forecast was 540.3 million dollars. Gross margins also registered an increase, from 59.4 percent to 60.2 percent.

Net income at the group amounted to 130 million, being the earnings per share (EPS) of 64 cents, during the last three months of 2012, largely above the previous year´s 32 million dollars or 20 cents a share. Analysts on average expected 41 cents per share, stressed ‘Fox Business’. Comparable store sales rose 41 percent in North America in the last quarter.

Same-store sales soared 41 percent in North America amid strong demand for luxury products and reported a 58 percent improvement in Europe. Meanwhile, the Licensing business revenue increased 52 percent on a year-to-year basis.

In the wake of the news, Michael Kors gave an encouraging guidance, projecting fiscal 2013 EPS of 1.80 to 1.82 dollars, above current estimates for EPS of 1.57 dollars, reported the CNBC. The company has estimated sales of circa 2.1 billion dollars for the full year, while market consensus estimate is 2.01 billion dollars, reported Fox Business. For the current quarter, Michael Kors forecast EPS of 32 cents to 34 cents on sales of between 515 million to 525 million dollars. “We believe that the Michael Kors brand is ideally positioned within the global luxury lifestyle market and we look forward to delivering on our long-term objectives,” Idol said.

"The valuation appears rich, but we expect to see estimates going higher following the conference call," said to the CNBC Corinna Freedman, analyst at Wedbush Securities. Freedman's firm has an ‘outperform’ rating on the stock, with a 65 dollars a share price target.