You could sell the stock at the "high"...do you know what the "high" is this time around?
Please tell us... What to do when you sell? Buy another stock that may lose your money?
Or, you could hold the stock and lap the indexes by a mile.
I choose the latter. To each their own...
I do not consider a 60% yearly gain to be pain and agony...
John Idol has said that legacy stores are being outsold by new stores. We know same store sales have been between 21%-28% the past few quarters, and that should not change this quarter. The 20-% same store sales is a goal for the firm longer term. That is a number all retailer envy.
Therefore, it stands to reason that new stores are the key to revenue growth going forward. That is why I try to post new store openings (management does not announce new store openings) . KORS has been opening stores at a rapid rate.
The Q3 2014 EPS report was phenomenal and I do not expect this quarter to come within 6% of that quarter. I do expect KORs to deliver revenue within 10% of Q3 and that would give them about $900 million in revenue.
There is no way of knowing how much they are spending on SG&A, E-commerce website, advertising, and other expenses used to grow their business. We know they are an excellent management team, and they will beat and raise this quarter.
The bottom line is they will beat EPS estimates and raise fiscal 2015 guidance...
Yup! Citi's Oliver Chen should be finishing up his negative note on KORS any minute now. He will be successful in getting cheaper shares for his clients. Last night's note from Topeka is having the same results. Run it up to $94 one day and take it down to $91 the next day.
New highs before the end of the month...
I have been there and feel your pain. One thing about the markets though: the next great thing may be just around the corner. Like AAPL at $10 when they came out with their first iPod. Or GOOG, QCOM, TSLA with their disruptive technology.
Stick with KORS for awhile as they are still in growth mode, and you will make money. The luxury retail business will not provide the returns of a great technology stock. But, right now KORS is close to being a "sure" thing as their is on Wall Street.
I expect more shenanigans and hijinx before next Wednesday. The MM's will be moving this stock like a yo-yo! None of that matters though. KORS will make new highs before the end of May. I am guessing a run to $110 is in order after they raise fiscal 2015 guidance from $3.84 to $4 or more...
There will be more hijinx before next Wednesday. Once their numbers are released the analysts will all be racing to be first to raise their price targets.
Piper Jaffray's Erinn Murphy has been the most honest and accurate analyst who covers KORS. I bet KORS blows right past that $114 target price. All of the analysts will need to raise their price targets after KORS provides forward guidance for fiscal 2014.
There are too many variables in retail to accurately predict a quarterly report. I will say KORS earns $5 in 2015.
The current quarter saw a cold winter, slow mall traffic and many discounts according to other retailers. KORS will not discuss any of that. They will discuss brand awareness, global expansion, and execution of sales. Hopefully, they will announce the launch of their e-commerce site?
In Q4 KORS ranked about 15% ahead of Q2 when they earned $.71! Therefore, I will say they report somewhere between $.78 and $.82! That is not what moves the stock. Their raised guidance is going to be significant.
Michael Kors Far East Holdings
Kors has granted retail licensing to a separate consortium known as Michael Kors Far East Holdings, or MKFEH, and that license is for an exclusive retail presence in China until 2041. What this means is that the public company can't open retail stores in the legally-defined territory of China. They can sell wholesale, but with China's fast-growing demand for aspirational luxury products, the bigger profits are in retail sales from a rapidly-expanding base of stores. The target 200 stores for the entire Far East seems low and may be a function of how much MKFEH can finance. Kors itself has a lot of cash that could be used for faster growth and a bigger store base. If Kors buys these licenses, that makes investment in the company more attractive.
China is expected to surpass North America in luxury consumer spending. Michael Kors is pursuing China like they did in North America and Europe. They are no longer "slow-playing" the Chinese consumer. The fashion show in Shanghai won rave reviews. There is no reason to think KORS will not take share from Coach as they have in every other market.
You are seeing knockoffs... I see them too... Fake Louis Vuitton bags are common....
I actually do not see a ton of Michael Kors bags in Silicon Valley either. Which could mean there is room for taking more market share? I see younger ladies wearing KORS clothes and watches.
I see the handbags when I travel... A ton of them at every airport....
KORS was up $1.03 this week with just a bit over $10 million shares exchanged. The volume was actually an increase from the previous week. The 10 day average volume is 1.7 million.
KORS reports earnings on May 28 and there are only six trading days before their report due to the Memorial Day holiday. There will be some shenanigans prior to the May 28 report, as usual, and that should give traders an opportunity to scoop shares at a lower price.
Credit Suisse failed in an attempt to knock the shares down today...
“Increasingly, we are seeing that this is more than the retail experience, but really the total brand experience which includes being able to see the artisans at work creating the products at headquarters.”
Deloitte’s “Global Powers of Luxury Goods 2014” report examines 75 luxury companies that sell designer apparel, handbags and accessories, fine jewelry and watches and cosmetics and fragrances.
Past sales are not always an indication of future growth. Deloitte devised the Q ratio to better identify the growth potential of companies.
While LVMH tallied the highest revenue by a significant margin between 2010-2012 and clocked strong sales growth, the conglomerate received a Q ratio of 1.45.
Michael Kors received a Q ratio of 13.69, Hermès received 8.05 and almost every other brand examined received a score below five.
When discussing valuation one must consider the growth rate. KORS grew at a 60% clip in 2014, and is likely to grow 50% in 2015 and they have a multiple of 30. Under Armour is growing at a 28% clip and has a multiple of 70. KORS is cheap in comparison.
Some bears will argue that KORS is trading at 5 times sales, and that is a really weak argument. On Wall Street EARNINGS is the most powerful criteria for moving a stock. KORS will earn $5 in 2015 with a 50% growth rate. I do not see how this stock will not trade over $120 this year. It is a no-brainer!
Michael Kors Holdings Ltd. (NYSE: KORS) has been a hot retail name in clothing and clothing accessories, and it could be the epitome of the overcrowded name. Despite awesome sales and growth, the company could just be a straight valuation call. Trading at 31 times earnings is rich for even a hot retailer. The consensus price target is $105.04, and shares closed Thursday at $91.27.
This is from their press release…
Nordstrom comparable sales, which consist of the full-line and Direct businesses, increased 3.3 percent compared with last year’s comparable sales increase of 3.1 percent. Top-performing merchandise categories included Accessories, Women’s Shoes, and Cosmetics.
Take from it what you will…KORS will have blowout numbers and raise guidance...