Luxury lifestyle brand Michael Kors Holdings Ltd. reported Tuesday a profit for the first quarter that surged from last year, driven by improved margins and revenue growth across its retail, wholesale and licensing segments. Both earnings per share and quarterly revenues significantly topped analysts’ expectations.
The company’s shares are trading more than 14 percent higher in early deals after the apparel maker provided strong guidance for the second quarter and raised outlook for the full-year 2012.
Retail net sales for the quarter surged 76 percent, driven by 76 new store openings and a 37.3 percent increase in comparable store sales. Wholesale net sales increased 66 percent and licensing revenues were up 61 percent from last year.
“We are pleased with the strong start to our fiscal year with a 71% increase in total revenue and 185% growth in net income. Our results demonstrate the strong momentum of the Michael Kors brand and the continued execution of our key growth strategies. Michael Kors’ luxury fashion designs are resonating globally with our customers,” Chairman and CEO John Idol said in a statement.
The Tsim Sha Tsui, Hong Kong-based designer of luxury accessories and ready-to-wear apparel reported net income of $68.65 million or $0.34 per share for the first quarter, sharply higher than $18.92 million or $0.13 per share in the prior-year quarter. On average, nine analysts polled by Thomson Reuters expected earnings of $0.20 per share for the quarter.
Total revenues for the quarter increased 71 percent to $414.87 million from $243.13 million in the same quarter last year, and topped seven Wall Street analysts’ consensus estimate of $367.96 million. Operating margin for the quarter expanded 85 basis points to 27.0 percent as Gross margin increased 420 basis points from last year.
Looking ahead to the second quarter, the company expects earnings in a range of $0.33 to $0.35 per share on projected revenues between $490 million and $500 million, assuming a comparable store sales increase of 30 percent. Analysts expect earnings of $0.28 per share on revenues of $422.22 million.
For fiscal 2013, Michael Kors raised its earnings guidance to a range of $1.32 to $1.34 per share from the prior forecast of $1.08 to $1.12 per share. The company also now projects total revenue between $1.8 billion and $1.9 billion, up from the previous guidance between $1.7 billion and $1.8 billion. Street is currently looking for full-year 2013 earnings of $1.12 per share on annual revenues of $1.79 billion.
In Tuesday’s regular trading session, KORS is currently trading at $48.39, up $6.04 or 14.26% on a volume of 7.77 million shares.