Michael Kors Earnings Preview: Can It Beat Growth Estimates?

Michael Kors Holdings Ltd (NYSE: KORS) is scheduled to announce its fourth quarter financial results on Wednesday, before the market opens.

According to Estimize, the Street expects earnings in line with guidance of $0.91 per share, while the crowd expects slightly better earnings of $0.93 per share. On the sales front, the company guided revenue of $1.065 billion, while Wall Street and the crowd expect revenue of $1.08 billion and $1.102 billion, respectively.

These results imply a year-over-year earnings growth of more than 16 percent, when compared to earnings of $0.78 per share reported in the same quarter last year. Revenue is also expected to surge from $917.5 million a year ago.

As it can be noted in the chart above, however, the company has a history of exceeding estimates and guidance.

What Analysts Think

In a recent report, analysts at Wedbush initiated coverage on three luxury retailers, among which Kors (Neutral rating, $63 price target) was included. According to an article published on Benzinga, “The analysts felt the stock was ‘on sale’ at current levels, however, the was no catalyst in sight to left the shares from the ‘value bin.’”

“Prevailing bearish sentiment and significant market-implied earnings cuts provide a meaningful upside opportunity in KORS shares for investors able to accurately time a stabilization in key operating metrics,” the experts added.