Michael Kors Beats Q2 Expectations, Shares Jump

Shares of Michael Kors Holdings Ltd KORS surged over 6 percent in pre-market trading after the company reported better-than-expected results for its fiscal second quarter. The company posted quarterly net income of $193.1 million, or $1.01 per share, versus $207 million, or $1.00 per share, in the year-ago quarter. Its revenue increased 6.9 percent to $1.13 billion. However, analysts were estimating a profit of $0.89 per share on revenue of $1.08 billion. The average estimate among 126 Estimize users was for earnings of $0.92 per share and revenue of $1.08 billion. Retail net sales rose 7.5 percent to $532.8 million, while wholesale net sales surged 7.8 percent to $554.0 million. Licensing revenue dropped 8.1 percent to $43.2 million in the quarter. Total revenue in the Americas climbed 4.5 percent to $838.2 million for the quarter, while European revenue rose 2.3 percent to $243.4 million. Revenue in Japan jumped 36.1 percent to $22.4 million. Its gross profit rose 3.0 percent to $664.4 million in the quarter. John D. Idol, the Company's Chairman and Chief Executive Officer, said, "We are pleased with our second quarter results, which were ahead of expectations and reflected the continued expansion of our luxury brand worldwide...Looking ahead, we believe we are well positioned for a positive holiday period with our exciting new product introductions and gifting assortments in addition to a captivating marketing campaign, all of which are designed to inspire our customer to celebrate the season with effortless glamour and style." For the third quarter, Michael Kors expects earnings of $1.44 to $1.48 per share, and revenue of $1.33 billion to $1.35 billion. Analysts projected earnings of $1.53 per share on revenue of $1.39 billion. Michael Kors projects FY16 earnings of $4.38 to $4.42 per share, on revenue of $4.6 billion to $4.65 billion. Analysts expected earnings of $4.43 per share on revenue of $4.65 billion. The company's board approved an additional share repurchase of $500 million. Michael Kors shares gained 6.18 percent to $41.75 in pre-market trading.