Posted 02/01/2014 08:02 AM ET
Michael Kors Holdings (KORS) will give investors a read on the spending habits of luxury consumers over the holidays when the high-end fashion house hits the Wall Street stage to deliver its fiscal Q3 results early Tuesday.
If market trackers are on the money, the seller of luxury clothing and accessories will show that its affluent customers continued to spend at a healthy clip, though at a slightly slower pace than it saw the prior quarter.
Still, it will likely upstage many of its competitors, which got stung during the highly promotional and competitive holiday season with weak profits and sagging margins.
Analysts polled by Thomson Reuters see its Q3 holiday quarter earnings rising 34% to 86 cents a share. That would be slower than the 45% gain in Q2. Revenue is forecast to jump 35% to $859.66 million, a bit less than the 39% increase it saw in Q2.
But judging from its track record, the strong performer could dazzle Wall Street with a beat. Michael Kors has consistently topped sales and earnings forecasts since its December 2011 IPO.
Cowen analyst Faye Landes expects Michael Kors to post "strong" Q3 results, she wrote in a preview note on the quarter.
She adds that the Cowen Consumer Tracking survey on handbag preferences over the holiday season released in January "indicated continued momentum for Kors in key consumer segments."
The survey showed that when it came to buying handbags over the holiday season, women in key consumer segments showed an increased preference for Michael Kors products vs. a year earlier, while the preference for Coach (COH) products declined.
"We believe the rising preference for KORS handbags demonstrates the ongoing strong appeal of the brand, boding well for KORS' other categories including watches and early stage product lines such as jewelry and men's," she said in her preview note.
Landes expects "continued strong comps" from Michael Kors in Q3 based on her survey data, as well as "Coach's reported softness and Macy's (M) reported solid holiday sales."
"While there have been anecdotal reports of markdowns over the holidays, we believe they haven't been dramatic for KORS overall," she noted.
Still, she "tweaked" her Q3 comps estimate to a 19% rise vs. a year earlier from a 24% gain, which she says is "roughly in line" with consensus of 20%, due to some possible weather impact.
Separately, high-end lifestyle products designer and retailer Ralph Lauren (RL) will report its Q3 holiday quarter results on Wednesday. Analysts see a 4.6% increase in EPS to $2.51 and a 10% revenue gain to $2.03 billion.
Read More At Investor's Business Daily: http://news.investors.com/business/020114-688439-michael-kors-holiday-season-seen-cheery.htm#ixzz2sBweXhIj
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