Summary of Important Points from Michael Kors Q4 Earnings Conference Call

FY2013 Record Results:

Total revenue increased 68% to top $2B
Total revenue grew 57.1% for Q4 YoY, $597.2M vs $380.0M
Retail sales up 58.8%
Wholesale sales up 59.4%
Licensing up 15.7% - more modest as increased advertising is charged against licensing segment
SG&A up 41.9% - higher retail occupancy and salary costs from new store openings, increase in marketing expenditures, increases in corporate employee-related costs
Same store comp's driven by additional luxury lines – handbags, small leather goods, watches, jewelry
Foot traffic up 20%
Continued momentum into Q1 for all regions

Outlook for 2014:

Total annual revenues between $2.65B and $2.75B assuming comp store sales increase of 15-20%, EPS $2.43-$2.47.
Q1 revenues $555m - $565m assuming 20% comp store increase. Diluted EPS $0.46 - $0.48

Europe as a major driver:

Over 100% revenue growth in Europe as number of store locations jumps nearly 30%
Strong local demand in Europe, equally strong across countries
Strong from a tourist standpoint
Double number of stores in Europe fiscal 2014 to nearly 100, sees long-term opportunity of 200 stores.
Europe sales similar to US in terms of product breakdown, slightly higher average transactions from Europe's higher (30-35%) retail price points.
36% Brand awareness in Europe – further opportunity for growth.

Strong Growth in Asia too:

Revenues for Japan up over 100% for FY2013
Increase Japan stores from 29 to 36 in fiscal 2014, long term opportunity of 100 stores.
Continue to focus growth in East Asia (China, Korea, Singapore, Malaysia, Indonesia, and Philippines), retail store growth target raised from 150 to 200 locations.

North America E-commerce launch slated for Q4 2014:

Hope to release international ecommerce site soon after domestic opening.
More profitable in long run as ecommerce site is setup in house as opposed to partnering with Neiman Marcus, once scale is achieved
Ecommerce revenues will have insignificant effect on results for fiscal 2014
‘Fairly large' SG&A impact this year pertaining to the setup of ecommerce site.
Big costs associated with building global platform