By Jamie Barrie E ven though Michael Kors Holdings Ltd. beat ana- lyst’s projections for their first quarter earnings they aren’t celebrating just yet. Kors remains optimistic but cautious with their forecast for earnings and sales this year. This is a very clear message to the market and giving investors evidence the luxury item retailer does not have stanch market confidence. The London-based company said profit will be $4.56 to $4.64 a share for their fiscal year ending March 2017. The biggest jolt was they are predicting that total revenue will be flat will be flat for the fiscal year. Analyst and market experts praised the company as their current projections matched those that were forecasted earlier in the year.
large reason that revenues will be flat. Idol is in good company as he is not alone what that opinion. Idol’s counterpart at rival Coach Inc. is trying to combat those same trends by reducing inventory at department stores at driving sales on full-price products. This is a good strategy, but could prove very challenging for Kors. Camilo Lyon, an analyst at Canaccord Genuity Inc., wrote in a report before the results were released “we question Kors’s ability to pull back on promotions without avoiding a precipitous fall in demand as the consumer has come to expect discounts.” Kors first-quarter profit was 88 cents a share which beat analyst estimates of 74 cents, on average with revenue up 0.2 percent to $987.9 million which out-paced marketing and analyst’s predictions.
Chief Executive Officer, John Idol at Kors believes decreased mall traffic and poor tourism numbers are a
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SPOTLIGHT ON BUSINESS • SEPTEMBER 2016
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