91 846
Fashion Jobs
Asset Protection - Agent - Fashion Valley
Permanent · San Diego
Asset Protection - Agent - Baybrook Square Rack
Permanent · Webster
Asset Protection - Agent - The Woodlands
Permanent · The Woodlands
Asset Protection - Security Ambassador - Yorktown Center Last Chance
Permanent · Lombard
Asset Protection - Security Ambassador - Nyc Flagship
Permanent · New York
Asset Protection - Agent - Downtown Portland Rack
Permanent · Portland
Retail Stock & Fulfillment - Fashion Show
Permanent · Las Vegas
Asset Protection - Agent - State Street Rack
Permanent · Chicago
Asset Protection - Agent - Hillsdale Shopping Center
Permanent · San Mateo
Security Ambassador - Palo Alto
Permanent · Palo Alto
Financial Analyst 2
Permanent · Seattle
Senior Financial Analyst - Corporate fp&a
Permanent · Seattle
Manager - Asset Protection - West County
Permanent · Des Peres
Asset Protection - Agent - Somerset Collection
Permanent · Troy
Asset Protection - Agent - Southpark
Permanent · Charlotte
Asset Protection - Security Ambassador - Laguna Hills Mall Rack
Permanent · Laguna Hills
Manager - Asset Protection - Ross Park
Permanent · Pittsburgh
Asset Protection - Agent - International Plaza
Permanent · Tampa
Asset Protection - Agent - Orchard Place Rack
Permanent · Skokie
Retail Stock - Great Lakes Crossing Rack
Permanent · Auburn Hills
Retail Stock & Fulfillment - Bellevue Square
Permanent · Bellevue
Asset Protection - Agent - West Towne Crossing Rack
Permanent · Madison
Nov 7, 2018
Reading time
2 minutes
Download the article
Click here to print
Text size
aA+ aA-

Michael Kors hurt by slow European sales, but Jimmy Choo is strong

Nov 7, 2018

Michael Kors undershot analysts’ revenue estimates for the first time in almost two years in Q2, as the luxury fashion firm saw lower sales at retail stores in Europe, where it’s trying to boost its performance.

Michael Kors

That sent its share price down almost 15% after the news broke and it’s hardly surprising. Kors is spending heavily to grow as a group. But issues with retail sales, plus lower profits despite overall higher revenue over the summer and early autumn, isn’t great news.

The company has been reducing inventory at its European stores after criticism that the main Kors brand was over-exposed. In a market where it’s competing with more ‘exclusive’ luxury brands such as Gucci and Louis Vuitton, anything that dilutes its luxury appeal is a problem.

But it’s working hard to change all that with its 2017 Jimmy Choo buy being part of a more upscale move, as is the current $2 billion+ spend to buy Versace.


Let’s look at the detail of Q2. Net income fell to $137.6 million from $202.9 million and total revenue rose 9.3% to $1.25 billion, including a $116.7 million contribution from Jimmy Choo.

Gross profit was $763.1 million and the gross margin was 60.9%, compared to $690.8 million and 60.2% in the prior year. Adjusted gross profit was $765.4 million and adjusted gross margin was 61.0%, compared to $690.8 million and 60.2% a year ago.

By individual brand, Michael Kors revenues were down 0.8% and comparable store sales were down in low single-digits. Retail revenue of $643.9 million was flat while comparable store sales fell 2.1%, which was in line with expectations. On a constant currency basis, comparable store sales dropped 1.3%.

Kors’ wholesale revenues exceeded expectations, “reflecting strength in the Americas” but were still down 1.3% to $457.8 million.

And Jimmy Choo “delivered better than anticipated revenues driven by strength in footwear.” It acquired Jimmy Choo on November 1 last year and compared to the brand’s standalone results from the prior year, revenue increased in double-digits.

Chairman and CEO John D. Idol said he was “pleased” with the results and even raised fiscal 2019 EPS guidance to a range of $4.95 to $5.05, reflecting double-digit earnings growth for the year. 

And he also made upbeat noises on the Versace buy. “As we enter the second half of fiscal 2019 we look forward to welcoming Versace into our group,” he said. “With the acquisition we have built one of the world's leading fashion luxury groups in just one year, setting the stage for accelerated revenue and earnings growth. This is a truly remarkable and historic moment for our company and we look forward to completing this transformational acquisition in the coming months.”

Copyright © 2022 FashionNetwork.com All rights reserved.