KORS traded tight from the week of February 21 to March 28 (6 weeks) and sold off from $99 to $85 and change. I doubt it does that again, but who knows?
Yes, it should be a bullish pattern. But, KORS is completely disconnected from the markets. I believe KORS is strictly trading on technicals right now. Another bounce from the 10 week line? A breakout from the three weeks tight? Continue forming right side of cup? Who knows what this crazy stock will do?
KORS has formed a three weeks tight pattern with light volume. Typically, this is a bullish pattern as it shows institutions are willing to hold at these levels. However, the last time KORS formed this pattern it was six weeks, and sold off hard from $98 to $88! Who knows what will happen this time?
The buildout in Europe is the most important thing since the last earnings report. Europeans spend more money on luxury goods than North Americans. KORS continues to expand its presence in Europe and it is becoming a larger part of the earnings pie. I would guess that Europe will provide 20% of revenue this quarter....
John Idol will speak next week at the DB conference in Paris, France.
Do you think he might discuss the way Michael Kors is dominating the European consumer luxury goods market?
I have been trying to inform this person that in order to correctly interpret the data one must compare months by the year. For instance, in June 2012 the trend for "Michael Kors" was 30! In June 2013 the trend was 43! In June 2014 the trend (thus far) is 53! Therefore, the rising trend is still in tact. Most firms would love a 10-15% increase. If you look at the April, May, YOY comparison it is trending much higher than that, and that is impressive. Remember that Michael Kors was the number one searched handbag on Google last year.
If you compare Michael Kors or KORS to Michael Kors Outlets you will find that the "outlet" search is a tiny sample in comparison to the other searches. Also, as michael Kors brand awareness grows it stands to reason that fewer consumers will need to search for the brand.
The entire retail sector was downgraded today, and KORS went down with the sector. Those macro type of reports do not accurately reflect the business of niche markets like KORS and it represents an opportunity for traders. I believe KORS is trading strictly on technicals lately.
Michaels Kors has some selected items on their website for sale, and this is in response to Coach announcing massive discounts at various times throughout the year. Coach cannot give their merchandise away. I noticed discounts in the MK stores recently. But, this is the first time I have seen it on their website. They even sent an email informing me of their website sale.
Some may spin this as a negative as it may pressure margins. But, their revenues this quarter will be massive and that will counter the "five times sales" crowd. The bottom line is still what matters and if KORS continues to beat and raise (there is no reason to think they won't) then the stock will continue to grind higher.
This quarter includes Easter, Mother's Day, Graduation, and Father's Day.
I would bet one billion in revenue for Q1 2015...
June 11, 2014
Michael Kors has decided to expand in Italy. The famous brand has opened two new stores: in Bari the south of Italy and Florence in the heart of Tuscany. In April, Michael Kors opened its doors in Via Principe Amedeo 66 in the centre of Bari, the shop that offers a large array of accessories as well as fine watches, jewellery, a selection of fragrances, shoes and sunglasses, also on offer is a fine range of prêt-à-porter clothing.
May instead saw the inauguration of a large boutique Michael Kors store in Piazza della Repubblica in the heart of Florence (Tuscany). Both stores offer the casual-chic look that this brand is known for using elements such as Zebra print decor, elegant metal surfaces and mirrored vintage picture and large format glossy that evoke the glamour of jet-setters and a timeless elegance.
20%-30% off on some selected men's and women's apparel, jewelry, footwear, and watches. I have never seen that before. The thought is they are doing some website discounting to appeal to the massive Coach sales which appeal to the thrifty shoppers.
The first full quarter with China Mobile numbers. Tim Cook eluded to the fact that Chinese consumers were switching from Android to Apple Inc. blowout numbers ahead...
They also guided fiscal 2014 higher and the stock is up more than 10% in after hours trading...
Restoration Hardware Holdings, Inc. Reports Record First Quarter Fiscal 2014 Financial Results
Q1 Net Revenues Increased 22%; Comparable Brand Revenue Growth of 18%; Adjusted Diluted EPS Increased 200% to $0.18
Company Increases Fiscal 2014 Guidance to Net Revenue Growth Between 20% and 22% from 18% to 20%, Adjusted Diluted EPS Guidance to Range of $2.24 to $2.30 from $2.14 to $2.22.
Restoration Hardware Holdings, Inc. (RH) today announced financial results for the first quarter ended May 3, 2014.
First Quarter Highlights
Net revenues increased 22% on top of a 38% increase for the same period last year
Comparable brand revenue growth was 18% on top of 39% for the same period last year
Adjusted operating income increased 204% to $14.0 million; GAAP operating income of $4.8 million compared to $0.5 million for the same period last year
Adjusted net income increased 217% to $7.2 million; GAAP net income of $1.8 million compared to a net loss of $0.2 million for the same period last year
Adjusted diluted EPS increased 200% to $0.18; GAAP diluted EPS of $0.04 compared to break-even for the same period last year
While trying to make sense of data from Google trends one must do a monthly comparison by years. April-June of 2013 vs. April-June of 2014. The trend is still considerably higher regardless of a dip in June 2014.
KORS will do record revenue this quarter. Remember that Easter, Mother's Day and Graduation are all in this quarter. I would guess about $1 billion in revenue, and that is a good start to their year. Quarter to quarter reports can be choppy. we just saw KORS sell off on a terrific quarter because of "margins." what if that is a one quarter affair (I believe it is). The EPS will jump on the $1 billion in revenue...
The last time KORS traded in a tight range it sold off from $100 to $89. What direction will it go this time?
KORS typically does not respond to upgrades. The stock will grind higher. Just check the weekly charts.
Coach is discounting like crazy!
They cannot give their bags away…
Kate Spade, Tory Burch, and Michael Kors have crushed the once giant of the industry. It will happen to Michael Kors as well...
Gross Profit Margins at KORS are extremely healthy as they have not done much discounting like other retailers. That is because of the consumer demand. KORS margins have been around 60% A drop to 59.2 is immaterial...
LOW MARGIN RETAILERS
Gross margins at retail are measured by the total percentage of profit generated by each item sold. For example, a 2007 "Forbes" magazine study noted that warehouse chain Costco generated margins of about 12.2 percent in the third quarter of 2006. That's considered a thin margin but Costco charges annual membership fees to customers so that it can keep its prices and margins low. Mass merchants such as Wal-Mart also generate low margins but make up for it through sales volume. The "Forbes" magazine study noted that Wal-Mart posted a gross margin of 23.7 percent in the third quarter of 2006, which at the time was its highest margin in four years.
High Margin Retailers
Retailers that sell more expensive goods and provide a higher level of customer service are typically the chains with the highest margins. According to "Forbes" magazine, high-end specialty retailer Tiffany's generated a whopping 55.4 percent gross margin in the third quarter of 2006. But the "Forbes" study speculated that Tiffany's and other retailers who keep prices high to generate high margins "may be sacrificing long-term growth for short-term profits" and run the risk of having customers migrate to other retailers that offer lower prices.