Citigroup Reiterates on Michael Kors on Market Leader Position

In a report published Tuesday, Citigroup analyst Oliver Chen reiterated a Buy rating and $82.00 price target on Michael Kors KORS. In the report, Citigroup noted, “We remain impressed with accessories over apparel and KORS remains a key stock pick within this context. Most impressed by comps (+22.9 overall and +45% in Europe, gross margins +150bps, and call outs of strength in watches, and shop-in-shops contributing to +30% wholesale growth. Inventory growth above revenue at +45.2% (vs. total rev 38.9%) but growth model makes this acceptable and our store checks indicate minimal near-term markdown risk. On the call we will look for global, eCommerce, supply chain, and inventory updates — KORS is also likely to tell investors growth and margin streak will not continue forever. We rate KORS Buy with a TP of $82 on 25x.” Michael Kors closed on Monday at $74.78.