Michael Kors profit soars on strong demand

Fashion company Michael Kors handily beat Wall Street's estimates for its third-quarter results and raised its full-year outlook, boosted by strong sales of its luxury items in North America and Europe during the holiday season.

The results sent the company's shares up 11 percent in premarket trade on Tuesday.

Revenue jumped 70 percent to $636.8 million in the quarter ended December, well ahead of the $540.3 million analysts had anticipated.

Kors, known for its designer wear, handbags and watches, raised its full-year earnings-per-share estimate to between $1.80 and $1.82 from a range of $1.48 to $1.50.

It now sees full-year revenue at about $2.1 billion, against the $1.86 billion to $1.96 billion forecast earlier.

Analysts had estimated full-year earnings of $1.57 per share on revenue of $2.01 billion, according to Thomson Reuters I/B/E/S.

Comparable-store sales in the third quarter rose 41 percent in North America, while those in Europe rose 58 percent.

Last month, rival Coach said comparable-store sales in North America fell 2 percent in the holiday quarter, indicating, according to some, that Kors is gaining market share.

Sales at its wholesale division rose 75 percent in North America to $573.1 million, helped by higher same-store sales and increased conversion of wholesale department stores into branded shop in shops, John Idol, chief executive officer said.

Net income rose four fold to $130.0 million, or 64 cents per share, up from $32.0 million, or 20 cents per share, a year earlier. Analysts had expected 41 cents per share.

Kors shares closed at $57.00 on the New York Stock Exchange on Monday.