Apparel company Michael Kors (KORS) has been one of the best IPOs of the past year. When it came public I thought it was pricey but high growth is so rare in the market, people are willing to pay up – you just never know how far up. The company reported earlier this week, and the quarter was very impressive. Guidace as well. However, there have been a big stock sale in this name and the market has been flooded with shares - even though the normal lockup is at the 6 month mark (June 20). You cannot blame insiders as the market has given the company a premium valuation and they simply took advantage of a very nice situation. However, that causes issues for investors of course.
- Michael Kors Holdings Ltd reported a stronger-than- expected fourth-quarter profit, fueled by growth in its own chain of stores, and the designer clothing and apparel company gave a full-year profit and sales forecast that handily beat Wall Street forecasts.
- Michael Kors, whose founder is one of the judges on the long-running TV fashion show "Project Runway," expects sales at stores open at least a year to rise 35 percent this current fiscal year, leading to full-year sales of $1.7 billion to $1.8 billion, with a profit of $1.08 to $1.12 per share.
- Wall Street analysts were projecting sales of $1.69 billion and a profit of 98 cents per share this fiscal year, according to Thomson Reuters I/B/E/S.
- Michael Kors' retail sales last quarter soared 80.3 percent to $172.2 million, helped by the addition of 71 new stores last year. Its fleet ended the year with 237 stores. Sales at its stores open at least year rose 36.1 percent.
- In its wholesale business, which includes sales to luxury chains including Nordstrom Inc and Saks Inc, and is still its biggest segment, revenue rose 45.5 percent.
- In Europe, where the company gets less than one-tenth of sales, business more than doubled, overcoming the austerity and anxiety about the euro crisis that has cast a pall over luxury sales there.
- Michael Kors, which started listing its shares in December, reported net income of $43.6 million, or 22 cents per share for the quarter that ended March 31, compared with $17.4 million, or 10 cents per share a year earlier. Excluding a one-time reimbursement of costs linked to its IPO, Kors earned 21 cents per share, beating analyst forecasts of 17 cents.
- Michael Kors expects first-quarter same-store sales to be up 35 percent and profits of 18 cents to 20 cents per share, above Wall Street forecasts of 17 cents per share.
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund's holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog