The Most Notable Comments from Michael Kors' Upbeat Conference Call
You've probably seen or heard about Michael Kors' (NYSE: KORS ) blowout quarter, but you may have missed some highlights mentioned in the conference call that ensued. It was one of the most upbeat calls I have ever listened to and it gave even deeper insights into the company's success and growth plans going forward. Take a look at a brief overview of the quarter and the five most notable comments to determine if Michael Kors belongs in your portfolio.
The king of affordable luxury
Michael Kors is home to one of the most fashionable lines of women's and men's apparel and accessories. The most consumer attention has been placed on its watches and handbags, but it has been gaining ground in clothing, footwear, sunglasses, and other categories as well. There are not many fashion-house brands that cater to the tastes of both women and men, but Michael Kors has apparently found the recipe for success.
A glance at the results
Michael Kors' third-quarter report was released on Feb. 4 and it exceeded analyst expectations on both the top and bottom lines. Here's a brief overview of the results:
Metric Reported Expected
Earnings per share $1.11 $0.86
Revenue $1.01 billion $859.94 million
- Earnings per share increased 73.4%
- Revenue increased 59%
- Comparable-store sales grew of 27.8%
- Gross profit increased 61.6% to $619.5 million
- Gross margin expanded 100 basis points to 61.2%
- North American sales increased 50.5%
- European sales increased 143.6%
- Other most notable statistic: there are now 533 Michael Kors stores worldwide, compared to just 368 at the conclusion of the third-quarter a year ago
This is the first time Michael Kors has exceeded $1 billion in revenue and this made for an absolute blowout quarter. These results caused the stock to spike more than 17% on the day of the release and it has continued its run higher.
The call that ensued
In the conference call following the earnings report, there was nothing but excitement and positivity pouring out of Michael Kors' management team, along with congratulatory comments from analysts. Here are the five most notable comments, all of which came from Michael Kors' Chief Executive Officer, John Idol:
"Our third quarter results were outstanding as our exceptional product offering created by Michael Kors and our designs teams, as well as our unique jet-set shopping experience made Michael Kors the go-to destination for the holiday season... We communicated with our customers through email, catalog, print, outdoor and social media, which effectively conveyed the glamour and luxury of our holiday offering, capturing the customers' attention and generating strong demand globally."
We knew the earnings results were outstanding, but the insight on how the company communicated with its customers is what really stands out. By using many channels of communication, especially social media, the company was able to reach as many people as possible and show what it had to offer throughout the insane holiday shopping season. Needless to say, the campaign succeeded.
"Our fragrance and beauty launch was met with great response... We plan to continue the global rollout of this new collection in additional markets in Europe, the Middle East and select markets in Asia in calendar 2014. Over the next few years, we expect to be one of the most significant brands in the luxury fragrance and beauty market globally."