Michael Kors Conference Call Highlights
Michael Kors (NYSE: KORS) reported its quarterly earnings on Monday. Shares of the company are down 6.5 percent.
Below are some key highlights from its conference call:
Global, Growth, Results:
• The strong performance across our product lines and geographies contributed to our financial results in the first quarter. Revenue grew 43 percent to $919 million and gross margin expanded 20 basis points.
• Income from operations grew 40 percent leading to an operating margin of more than 30 percent.
• We achieved these strong results as we continued to successfully execute on our six growth strategies.
• First, revenue in North America grew 30 percent, driven by comparable store sales increase of 18.7 percent.
• We've been very successful in our North American business thus far, and we are still building momentum.
• Second we're on track with our retail expansions in North America. During the first quarter, we opened 13 net new stores.
• Long-term, we believe that North America market can support 400 stores, excluding potential men's locations.
• Third, we successfully converted a 108 department store doors into branded shop-in-shops globally and ended the first quarter with 1,670 shop-in-shops worldwide.
• For fiscal year 2015, we now plan to convert 750 department store doors into shop-in-shops across all categories globally.
• Fourth, in Europe revenue grew 128 percent driven by a comparable store sales increase of 54.2 percent and the opening of 21 locations.
• Fifth, our business in Japan continues to develop. Revenue in the quarter grew 89 percent driven by comparable store sales increase of 48.8 percent and the opening of four new locations during the quarter.
• Ultimately, we believe that we can have 700 company-owned retail stores worldwide, which does not include potential men's locations.
• In Europe, we saw revenue growth of 128 percent during the quarter to $185 million with a comparable store sales increase of 54.2 percent.
• In our Licensing segment, revenue grew 30.5 percent to $32.1 million for the quarter as compared to $24.6 million last year, primarily driven by watches as well as jewelry.
• As you know, we are transitioning our new eyewear partner Luxottica in January 2015 and we expect this transition to impact our royalties for at least two quarters.
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