What's Ahead For Michael Kors? Dana Telsey Provides Perspective

Shares of Michael Kors Holdings Ltd KORS have been in a free fall in the past year, down almost 50 percent. Dana Telsey, Telsey Advisory Group, was recently on CNBC to share her outlook on the company and its stock.

Not Growing At The Same Rate

“We lowered our price, we lowered our rating and frankly handbag slowdown is certainly a concern,” Telsey began. “We are seeing other categories pick up - cosmetics, footwear, an improvement in Jewellery. It’s disappointing, certainly the growth that you have had at Kors. It’s still going to grow, but not at the same rate as expected and there’s other categories that consumers are becoming more interested in.”

Rating & Price Target

Telsey was asked her rating and price target on the stock. She replied, “Market Perform rating went to from an Outperform rating. Price target is $50. This year overall you are going to see more modest growth, we will have to see if Europe and extended categories take up the growth next year.”

Outlook

On what will cause her to put a Sell rating on Kors , Telsey said, “I think, it’s basically more modest growth rate than what it had been before. I think, you have a category that’s growing at a lesser rate. Kors has still new products that continue to gain share, whether it’s small leather goods, whether it’s jewellery, the handbag category itself, the [outlet] stores that it has along with the full-priced stores."

“These full-priced stores that they have, it’s the weakness in tourism that’s hurting some of the businesses in urban areas. You still have a business overall that’s quite robust in terms of the size and the scale of the business in the categories they are adding. It’s a more modest rate of growth this year than what you had in the years past,” Telsey concluded.