KORS cleared the $78.72 buy point as it broke out of a flat base.
The luxury retailer Michael Kors (KORS), broke out of a six-week flat base and rose $3.97 (5.26%) this week to close at 79.40. It's a second-stage base that corrected 10%.
The breakout was on massive volume, and the catalyst was a sterling earnings report before the open.
Earnings per share came in at 71 cents vs. analysts' expectation of 68 cents. That's a 45% increase over the year-ago quarter. The company guided revenue higher for fiscal Q3 with same-store sales rising 15% to 20%.
KORS rose more than 5% this week as it reported stellar earnings.It cleared an alternative 78.72 buy point from a flat base.
Before Tuesday's open, the fashion house cruised past views with fiscal Q2 earnings that grew 45% to 71 cents a share. Sales, which also topped expectations, climbed 39% to $740.3 million. The company saw strong demand for watches and handbags.
At the end of the third quarter, 789 mutual funds owned shares of Michael Kors. That's up from 468 four quarters before that. Leading growth funds such as Fidelity OTC and Columbia Marsico 21st Century had positions at the end of the last quarter.
KORS will outperform most stocks over time. Their conference call was one of the most bullish calls I heard this entire earnings season. There are not many firms with blowout numbers on the sales side. Yes, many are beating EPS numbers with job cuts, and stock buyback programs. But, KORS is doing it with massive same store sales, and new creative designs which women are flocking to. There is a migration from Coach and to Michael Kors if I can continue with the "flocking" theme.
The relative strength number will match the impressive EPS numbers soon. KORS is in the 99th percentile in EPS of all firms reporting. Those fundamentals will eventually be rewarded.
Will we seeing a rotation out of some former leaders like TSLA, LNKD to KORS?
If it trades down to $75 ($76 is more likely) then it is a screaming buy at that point... I would bet KORS trades over $88 before the next EPS report in February.
An indication the economy is pretty strong and shopping will be strong...
Over 200,000 jobs created in October...
Retailers bucked the head winds of a government shutdown and an uncertain economy in October, posting sales gains that topped forecasts in reports out Thursday.
The results reflect some resiliency on the part of consumers in a challenging environment — an encouraging sign as retailers head into the holiday shopping season with promotions planned ahead of the traditional Black Friday sale discounts.
Sales at stores open at least a year rose 4% in October vs. a year earlier for those retailers reporting monthly comps, says Ken Perkins, president of Retail Metrics. Analysts had predicted a 3% gain. Factoring out results from drugstore chains Walgreen (WAG) and Rite Aid (RAD), retailers posted a 3.4% increase.
All in good time my friend...check back to August to see what happened after last EPS report. The stock did not go straight up. It took some time to reward the latest EPS report.
Relative strength is a measure of price trend that indicates how a stock is performing relative to other stocks in its industry.
KORS is gradually climbing in relative strength. It is already in the 99th percentile in EPS, and it is only a matter of time until the relative strength number matches the EPS growth. The RSR of 85 will eventually be in the mid 90's. Long and strong...
Disruptions in shipping and distribution. Our operations are subject to the impact of shipping disruptions as a result of changes, or damage, to our distribution infrastructure. During the quarter ended September 28, 2013, we experienced disruptions to the shipping of our products within the U.S. as a result of implementing new material handling equipment and systems for purposes of automating our U.S. distribution facility. The disruption related to this implementation impacted our ability to ship at full capacity during the quarter and may continue to do so for the remainder of this fiscal year. In addition, we expect incremental expenses related to this implementation to be incurred through the end of this fiscal year. Accordingly, these disruptions to our shipping may have an impact on our earnings for the remainder of this fiscal year, with regards to the effects on both our net sales and operating expenses.
KORS still guided to $2.81 despite this issue which will affect sales through fiscal 2014...
Citigroup Inc. reaffirmed their buy rating on shares of Michael Kors Holdings (NASDAQ:KORS). Citigroup Inc. currently has a $82.00 price objective on the stock.
“We remain impressed with accessories over apparel and KORS remains a key stock pick within this context. Most impressed by comps (+22.9 overall and +45% in Europe, gross margins +150bps, and call outs of strength in watches, and shop-in-shops contributing to +30% wholesale growth. Inventory growth above revenue at +45.2% (vs. total rev 38.9%) but growth model makes this acceptable and our store checks indicate minimal near-term markdown risk. On the call we will look for global, eCommerce, supply chain, and inventory updates — KORS is also likely to tell investors growth and margin streak will not continue forever. We rate KORS Buy with a TP of $82 on 25x.,” Citigroup Inc.’s analyst wrote.
A number of other analysts have also recently weighed in on KORS. Analysts at Canaccord Genuity reiterated a buy rating on shares of Michael Kors Holdings in a research note to investors on Monday. They now have a $90.00 price target on the stock. Separately, analysts at Jefferies Group reiterated a hold rating on shares of Michael Kors Holdings in a research note to investors on Monday. They now have a $80.00 price target on the stock. Finally, analysts at Maxim Group initiated coverage on shares of Michael Kors Holdings in a research note to investors on Tuesday, October 29th. They set a buy rating and a $99.00 price target on the stock. Two research analysts have rated the stock with a sell rating, six have issued a hold rating, twelve have assigned a buy rating and one has assigned a strong buy rating to the stock. Michael Kors Holdings currently has an average rating of Buy and an average target price of $82.28
Michael Kors Holdings Ltd (NYSE:KORS) "knows how to make it work," according to a recent article on CNNMoney, and the company's stronger-than-expected turn in the earnings confessional earlier this week underscored this statement. What's more, same-store sales for the fiscal second quarter surged by 23%, marking the 30th consecutive quarter of gains. Meanwhile, the apparel producer raised its full-year outlook, giving KORS some momentum heading into the holiday season.
The author goes on to note that the firm is a standout in its sector, particularly when compared to Coach, Inc. (NYSE:COH), as the latter's disappointing earnings report last month dragged the shares further south. Additionally, some feel that the Coach name's lack of association with an actual person is also hurting the once-hot luxury brand. On the other hand, KORS is considered a "glamorous designer label" yet still offers items at affordable prices. "The company is generating consumer excitement in a way we've never seen in the luxury accessories category," said Omar Saad of the ISI Group. The article concludes by pointing out that some of its global competitors -- such as H&M and Fast Retailing -- sport an average market value of $60 billion, versus Michael Kors' current market value of about $16 billion, leaving plenty of room for future growth.
KORS has certainly displayed its technical chops in 2013, gaining nearly 55% year-to-date. In addition, the shares touched a record high of $80.43 yesterday, thanks to a pair of price-target hikes at Canaccord Genuity and Wedbush Securities. On the charts, the stock continues to trade above its 10-week moving average, which has served primarily as support since early May.
Nevertheless, there are still a number of doubters among the options crowd. In fact, KORS' 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.93.
I sold TSLA at $158 and it is now trading at $138. It is likely to correct 30%-35% from the top of $194.
KORS conference call was one of the more bullish calls of this earnings period. I will add to KORS after the profit taking is done.
Typically, I do not like to trade in and out of stocks.
There is a gap in KORS chart at $76.05! I will place a buy order at that price every day until filled. KORS has always filled the gaps, and this time will be no different. There has never been a breakaway gap with this stock.
There is always a first time. Could this be it?
DB thinks it is cheap...
Deutsche Bank maintained a Buy rating on Michael Kors (NYSE: KORS) and raised its price target to $91.00 (from $85.00). Analyst Dave Weiner described Q2 results as solid.
"Notably, given investor angst in to the print, mgmt.'s reassuring guide & underlying confidence provide comfort around the next leg of the story. In terms of growth, Kors is gaining validation as a global luxury brand as it makes inroads in to Europe. Though KORS is up ~55% YTD, in our view, the current multiple does not yet properly value its strong/scarce prospects," he said.
I am convinced that KORS is the only retail stock to own. Too many of the CEOs have been whining about the government shutdown affecting business. Or the currency exchange rate has cut into earnings. Or, slow mall traffic affected business this quarter.
KORS management just lays out a clear path for growth and they execute the plan without whining or complaining about any ancillary details. They produce a clear EPS report quarter after quarter. That is why I want to invest more of my hard earned money with KORS.
I am sure they will produce a similar EPS report in February without any whining or excuses... They are consistent!
Fossil Group's (FOSL) concerns about U.S. customer traffic and cautious earnings guidance for the key fourth quarter sent shares down Wednesday, a day after reporting Q3 results that topped views.
The Richardson, Texas-based maker of watches and accessories sees Q4 earnings per share of $2.26-$2.46, below analysts' forecasts for $2.59.
"In the United States, traffic remains a head wind, and there are concerns about consumer confidence as we go into the holiday season," Chairman and CEO Kosta Kartsotis said on a conference call. "That can certainly impact our business and our near-term expectations."
In addition to weak U.S. traffic, many retailers are indicating they expect heavy promotions for the holiday season, CFO Dennis Secor said on the call, with six fewer shopping days on the holiday calendar due to this year's late Thanksgiving.
"It remains to be seen how the consumer will shop and how our wholesale partners will reorder," he said.
I sold all of my TSLA shares (200) today (small loss) and am looking to add to my KORS/NFLX holdings.
The reason I sold TSLA is because the CEO is not transparent about future growth. KORS management team is really specific about where there growth will be, and that is comforting for me to know as an investor. Also, they have a track record of executing on their strategic growth plan which has been impressive. I am sure going forward they will get into more markets like India, Brazil, and China. But, for the next few years, KORS seems focused on dominating in No. America, Europe, and Asia.
I know many retail investors will be sinking their money into TWTR tomorrow. I wonder how many are selling TSLA and looking for great growth opportunities?
Currently, KORS is trading with a 35 multiple. The management team expressed in their conference call they expect 25% growth over the long term. ULTA has expressed they expect 25% growth also. However, ULTA is trading with a multiple of 45. I believe KORS will see some multiple expansion, possibly up to 40, and that is about right for a stock growing at 25%. In fiscal 2014 KORS will grow at more than 50%.
Also, KORS guided to $2.81 for fiscal 2014, and with a multiple of 40 KORS could trade to $112 in the near future? KORS likes to sandbag their numbers and will earn more than $3 in 2014. Can we see our first $1 quarter in Q3?