How many of you investors go to the mall and talk to the sales reps at Macy's, Nordstrom's or Michael Kors and see how sales are doing? I go almost every weekend and talk to people and see for myself as I have a few sheckles invested, and will not be surprised at slowing sales.
Ask any sales rep at Macy's or Nordstrom's their top selling watch, "Michael Kors" is the first words out of their mouth. Most stores you don' t even need to ask as their display dwarfs that of any other brand. The handbag department has kore competition and Michael Kors is in the top three of Kate Spade and Tory Burch.
They now have 400 Michael Kors stores and Same Store Sales growth will normalize to 15%-20%! But, I can tell you they are still seeing heavy traffic in San Francisco and Palo Alto.
Where do you think the stock price will be after the Christmas quarter and do you think KORS will go back to the low 70s this year?You say that you will not be surprised at slowing sales,is that what the reps at Macy's,Nordstroms,etc were suggesting at the locations you visited?
He is saying as I mentioned in another post that eventually with 400 stores, opening "only" 40 new stores/year will result in a slowing percentage growth. He is talking that it will slow in about 2-3 years when they are like RL - not many more places to expand, just working to keep the momentum.
As for the stock, expect it to break $3 EPS and keep a 30+ PE, ie easily breaking 90. This weak consumer junk is just that - junk. The news is framing the holiday to be weak so that retailers can magically beat the low-ball estimates.
I see the stock trading between $120-$1250 in 2014! I doubt it goes back to the low $70's. The reps at department stores tell me Michael Kors is their top selling watch and top three handbag seller. Just look at the size of the display in most stores, and that tells you all there is to know. The Michael Kors watch displays dwarf the Marc Jacobs, Movado, Fossil, Guess, and any other name brand by a mile.