Yahoo Finance Have You Added Michael Kors (KORS) to Your Portfolio Yet?
More than a month has passed since Michael Kors Holdings Limited KORS released its third-quarter fiscal 2016 results which have set the stock rallying. To some investors, choosing the stock may appear a no-brainer. This is because, immediately after an earnings release, a company is almost always on the investors’ radar. While better-than-anticipated results make it a favored pick, a lag on expectations hits investor sentiment. So, earnings releases prove to be the right time for investors to put in money into stocks or disinvest.
Shares Marching Higher
Ever since Michael Kors reported its quarterly numbers on Feb 2, 2016, its shares have gained more than 44%. The company’s earnings trumped estimates in third-quarter 2016, marking the third consecutive quarter of a beat. In the fiscal third quarter, this luxury lifestyle retailer reported earnings per share of $1.59, which increased 7.4% year over year and also surpassed the Zacks Consensus Estimate of $1.46.
Further, total revenue came in at 1,397.5 million, above the Zacks Consensus Estimate of $1,350 million and also up 6.3% year over year. The strength in the top line was primarily driven by an increase in retail net sales in the Americas, Europe and Japan.
Favorable Estimate Revisions
Following Michael Kors’ stellar performance, the Zacks Consensus Estimate witnessed an uptrend as analysts raised their estimates. Analysts polled by Zacks are convinced that this Zacks Rank #2 (Buy) stock will see an upbeat performance in the future as well. Over the past 60 days, the Zacks Consensus Estimate for fiscal 2016 increased from $4.32 to $4.42 per share.
Store Expansion Impresses
In an effort to drive the top line, Michael Kors is presently focusing on store expansion. In the third quarter of fiscal 2016, the company launched 34 new stores, which includes 15 in the Americas, 16 in Europe and 3 in Japan. At the end of the quarter, the company had 857 stores across the globe, inclusive of licensed locations. Given the scope for high profits from company-owned stores, management is laying more emphasis on opening retail stores. The company is also focused on expanding its Men’s business segment through the setting up of standalone stores and by also adding a Men's section in its existing outlets in North America, Europe and Asia. Michael Kors continues to see opportunity for 500 Men’s stores and also plans to open 75 men's shop-in-shops worldwide this year.
Other Stocks to Consider
Some other favorably ranked stocks in the retail sector are Express Inc. EXPR, American Eagle Outfitters, Inc. AEO and Urban Outfitters Inc. URBN. Express and American Eagle Outfitters currently sport a Zacks Rank #1 (Strong Buy), while Urban Outfitters holds a Zacks Rank #2.
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AMER EAGLE OUTF (AEO): Free Stock Analysis Report
URBAN OUTFITTER (URBN): Free Stock Analysis Report
EXPRESS INC (EXPR): Free Stock Analysis Report
MICHAEL KORS (KORS): Free Stock Analysis Report
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