World Footwear

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Flat revenues at Michael Kors

Aug 11, 2016 United Kingdom
Flat revenues at Michael Kors
Strong results registered by the brand in revenue in North America allied to a consolidation of the global presence. A decline in the tourism flows and in traffic malls has offset the good results
John D. Idol, the company’s Chairman and Chief Executive Officer, commented: “We are pleased to have once again exceeded our first quarter revenue and earnings per share expectations. We delivered another quarter of strong growth in our North American digital flagships, further expanded our presence globally, particularly in Asia, and expanded our fashion product offerings. However, this progress was muted by the continued decline in mall traffic trends as well as a decrease in tourism in certain major cities which negatively impacted our comparable sales performance during the quarter.”

For the first quarter ended on the 2nd of July total revenue for Michael Kors increased by 0.2% totaling 987.9 million US dollars. On a constant currency basis, total revenue was flat versus the prior fiscal year.

Retail net sales increased by 7.6% reaching 62.9 million, driven primarily by 221 net new store openings since the end of the first quarter of fiscal 2016, including 145 stores associated with the company's recent acquisitions in Greater China and South Korea and the consolidation of the Latin American operations.

Comparable sales decreased by 7.4%. On a constant currency basis, retail net sales grew by 7.4%, and comparable sales decreased by 7.6%. Wholesale net sales decreased 7.0% totaling 394.4 million US dollars and on a constant currency basis, wholesale net sales decreased by 7.2%. Licensing revenue decreased 20.9% to 30.6 million US dollars.

Total revenue in the Americas decreased by 5.0% on a reported basis and by 4.8% on a constant currency basis. European revenue grew by 3.3% on a reported basis and by 2.9% on a constant currency basis. Revenue in Asia increased by 74.5% on a reported basis and by 67.7% on a constant currency basis.

Net income attributable to Michael Kors for the first quarter of fiscal 2016 totaled 174.4 million US dollars.

At the 2nd of July the company operated 771 retail stores, including concessions, compared to 550 retail stores, including concessions, at the end of the same prior-year period. The company had 110 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 881 Michael Kors stores worldwide at the end of the first quarter of fiscal 2017.

The company believes they “are on track to deliver on our revenue and earnings per share goals for the year.”

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