Michael Kors Holdings Ltd KORS reported better-than-expected earnings and revenue for the first quarter. However, the company offered a soft outlook for the second quarter and fiscal year 2017.
The global apparel retailer's net income was $147.1 million, or $0.83 a share, in the first quarter. On an adjusted basis, its net income would have been $156.0 million, or $0.88 a share. This was way ahead of the Street analysts' estimate of $0.74 a share.
Michael Kors' total revenue rose modestly by 0.2 percent from $986.0 million to $987.9 million surprising the Street, which was predicting a year-over-year drop of 3.3 percent. On a constant currency basis, revenue was flat.
The stock traded lower by $2.11, or 4.21 percent, to $48.00 on Wednesday morning.
Chairman and CEO, John Idol, commented, "Looking ahead, we remain focused on executing against our long-term growth strategies across both product categories and regions. For the Fall season, we are excited about the launch of several new digital flagships in Europe, the debut of our Michael Kors ACCESS line of smartwatches and trackers and our new Wonderlust fragrance, as well as the continued development of our men's business."
Moving ahead, the retailer expects EPS to be $0.84-$0.88 on revenues of $1.07-$1.085 billion for the second quarter. Street analysts' have consensus EPS estimate of $1.03 on $1.11 billion revenue.
For the fiscal year 2017, Michael Kors sees adjusted EPS in the range of $4.56-$4.64 while predicting GAAP EPS of $4.51-$4.59. The company expects revenue to be flat and that comparable sale to drop in the mid-single digit range. Analysts are looking for an EPS of $4.60 on $4.66 billion revenue.
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