During the conference call John Idol mentioned the amount of fans following KORS on Instagram, Twitter, and Facebook. KORS believes they need to connect with their consumer via social media, and it piques more interest in their products, and eventually brings more potential shoppers into their stores. They know from social media there is big demand in Latin America, and they plan to tap into that revenue stream in a big way. This management team is pretty sharp.
I am glad to have someone on board more bullish than me😄
The stock is trading near its upper trend line, and due for a pullback. I do not really care about where it trades in the next few months (I said that when it was in the $50's too)!
I am looking for two things in the near term..
1. Short interest- if the shorts liked KORS at $75 they should love it at $95? I encourage all shorts to do their thing, and short as much as possible as they will provide fuel for this fire. I am hoping the short interest increase in the coming months
2. Chart Pattern-can KORS hold this huge gap up? Will it form a flat base or three weeks tight pattern? Will it sell off and form another cup base? KORS is up more than 20% in the past week, and triggers the "8 week hold" rule.
This will be a great year for KORS!
I believe you are correct and the $96-$98 area is a top for the current leg up?
Have you noticed the past few sessions an extraordinary amount of volume is coming in during the last five minutes of the session, and driving the stock higher. Could this be the last of the shorts who just want to get out and end their misery? When that subsides you gotta expect the longs to take profits and move their money elsewhere. I will be happy if the stock can just hold the first day surge price of $89. If the stock trades up to $98 expect a 10% retracement back to the $89 area. Good Luck!
In May KORS will close the books on 2014, and look ahead to 2015. The Q4 2014 guidance is ridiculously low and another earnings beat is a slam dunk. The current estimate for fiscal 2015 is $3.82, and I suspect that KORS management will raise those estimates to $4 in May? Realistically, they will earn near $5 and have a nice .425 per quarter cushion to lowball their numbers.
At the May conference call the management team will also give the brand awareness numbers for specific regions, and they are seeking 50% brand awareness for all of Europe. They are already above that in some countries (United Kingdom). I think the analysts community will be surprised by how fast the brand has grown over seas.
KORS has more than 100 new stores open for Q4 2014 than they did in Q4 2013, and with same store sales at 20% it is easy to figure they will smash their EPS and revenue guidance. They have also been executing the conversion to shop in shops at an incredible rate. This all points to strong momentum heading into fiscal 2015.
This will be the year where Europe becomes a far greater percentage of the revenues generated by KORS.
This is an important factoid as the European same store sales are triple that of North America, and the
margins are greater there than in North America. I believe KORS will generate nearly $1 billion in revenue from Europe alone in fiscal 2015.
There is no reason to sell this stock even if the market corrects, and the stock falls below its 10 week line (wich I am sure it will do at some point). I just try to remember to focus on the bigger picture when the stock sells off. 2015 will be a great year for KORS!
Q, are you officially bumping up your $120? :)
You asked this in another thread, and I wanted to answer you where it would not be lost off topic.
No! I am not raising my conservative price target for calendar year 2014 of $120. Yes, in fiscal 2015 I believe KORS will generate around $5 in EPS, and with the current multiple it should trade well above the $120 price target. But, you have been around long enough to know the history of how this stock trades.
After the euphoria of the massive earnings beat is gone, the shorts will be back to attacking this thing, and it will form another base prior to the next EPS beat. This is a good thing as it gives new buyers a chance to get in at a better price and/or if gives add on buy points. This will go on all year.
By the way, I believe that $120 in the absolute minimum KORS will trade at by year end...Good Luck!
Congrats on getting into the stock market at such a young age. It is the best money making vehicle available to the "Average Joe." This is a stock picker's market where the winners will be rewarded and the losers punished. KORS is definitely a winner in luxury retail.
Some of the winners that I like for now: NFLX, GOOG, CMG, FB, UA, REGN, BIIB, CELG, GILD, NVO, TSLA, WFM
You do not need to chase these stocks. Buy them on any weakness, and/or pullbacks, and you will make money. Good luck!
It depends on your time frame. If you are a trader looking to make a quick buck, then I cannot help you. If you are looking for an investment that will reward you over time (12-24 months) then I think you are wise to invest in KORS as their run is just getting started and the stock just broke out of a second stage base.
The folks I consult with think KORS will trade between $120 and $160 in 2014. These are the same folks who advised me to buy NFLX at $100 (did not buy until $161). KORS is showing explosive EPS and revenue growth, and it is likely they will see multiple expansion in 2014. KORS will earn $3.20 this year, and $4.70-$5 in 2015. Therefore, you will own part of a company growing EPS at a 50% clip and earning $5. If KORS were given the same multiple as Under Armour it would be trading over $300 this year. But, it is a luxury retailer and the multiple should hang around .67%-75% of its growth rate. A 50% EPS grower with a multiple around 35. $5 multiplied by 35=$175. KORS Q1 2015 begins in April.
KORS EPS report blew a huge hole in all of the shorts thesis. The slow mall traffic theme was gaining steam as some of the lesser retailer posted awful numbers. The short thesis of a "promotional holiday season" was fortified by the Coach EPS report. Technically, the stock was a train wreck as it had pierced its 10 week line in heavy volume. All things were pointing to KORS stock rolling over and the ride was over.
Then KORS delivered a punch to the stomach with their report on Tuesday which showed same store sales increasing, margin expansion, and accelerating revenues and EPS. Nobody saw EPS of $1.11 and more than one billion in revenues for the quarter. All of this was completely contrary to the short thesis.
But, the shorts will not surrender and have devised a new thesis for KORS. The brutally cold and harsh winter will keep shoppers in side for the first few months of the quarter. The retailers cannot thrive in this environment. KORS is trading at six times sales. Jeffries analysts Randal Konik "cautions investors against extrapolating these exceptional results into perpetuity" and puts his price target at $85. I suspect we will see some of the shorts theme creeping back into the stock as they try to knock it down. They are setting themselves up for the knockout blow this year!
KORS will absolutely crush the lowball guidance they gave last week of $3.07-$3.09 for the quarter, and earn around $3.20. They are growing so quickly all over the world, and the management team has a solid grasp of their business. Their conference calls are like broken records.
KORS is up more than 20% in the past five sessions which triggers the 8 week hold rule.
We will see how it performs from here, and if the shorts have the courage to short more or just cover and take the losses.
John Idol said they plan on having "40 stores in the Latin America region." I would think that region could handle more stores than that. But, he knows what he is doing.
KORS will always give you a chance to buy the stock. No need to chase it here...
I was hoping for a pullback to add also. But, that will not happen! NVO is breaking out of a year old base and I expect a 20% move from the breakout ($38.50)! It should form a new base around $45-$46? They have started a massive share buyback program. That should put a floor on the stock. Any time it has a nice dip the firm can buy its own stock. That will also help with EPS going forward. I was hoping for an increase in the dividend after the five for one stock split...
We are at the very beginning stages of understanding what's happening in Latin America. We know she desires our product. We have very, very high brand awareness in the Latin American market, which is quite interesting. We never ran any ads, we had least tourists there, so our initial results are quite outstanding, so we are very comfortable with where we are going to be in the Latin American market.
We'll go next to Erinn Murphy of Piper Jaffray.
Erinn Murphy - Piper Jaffray
Thank you. Good morning and congratulations on just a great quarter. John, just wanted you to maybe focus a little bit more on Europe. If you could just talk a bit more about the mechanics in that market? I mean, it seems like you guys are really shaking things up across the content in a very positive way. Maybe you help us understand Europe's importance strategically as you further build brand awareness in newer market even like Latin America, China, given the tourist flow there. Then just stick with the holiday quarter in Europe, could you just share some perspective on what you saw from a local versus tourist consumer there?
John Idol - Chairman, Chief Executive Officer and Director
Sure. I'll start with Europe, first. Good morning, Erinn. Europe was an extraordinary holiday season for us. You know while there was conversation about traffic in the United States, the traffic flows in Europe were just extraordinary. I think that speaks to two things.
Number one, we talked before about where we are building the business and who we are taking market share from et cetera, and I know lots of conversation has been around one of our main competitors, but in fact we think we are beginning to take market share from very large luxury companies that some of you cover.
In particular, in Europe that's we have two sets of competitors. We have very large luxury players and then we have all these regional players that are across the board. We clearly are becoming the number one, and if we are not already there, the number one accessible luxury handbag company in the market, but we are also by virtue of where we are opening our retail locations on streets next to all of the very large significant and heritage luxury companies, we are starting to take market share there and we think the customer is resonating with the Michael Kors' product design.
Michael has been on trend season-after-season.
The next region for big growth will be in Latin America. Of course, this will be after KORS is fully executed their European growth strategy...
From the conference call...
In Latin America, we are pleased with the progress of our retail expansion. We opened two stores region in the major Brazilian markets of Sao Paulo and Curitiba during the quarter, and have currently have seven locations in this region with three in Brazil, one in Venezuela and three in the Caribbean.
We believe that there is considerable demand for Michael Kors brand in Latin America and we are excited to be expanding our presence across these markets. Ultimately, we believe the Latin American market can support 40 retail locations over the next several years.
KORS has earned $2.43 this year, and for them to meet the $3.09 all they need is $.66! KORS earned $.50 in Q4 2013! That is such an easy hurdle for them it isn't even funny. This quarter is heavily fortified with sandbags. $3.20 for fiscal 2014 is a slam dunk. The quarter is already half over, and business is booming.
They opened 19 new stores in Europe and 20 in North America last quarter. The new stores are doing better than the legacy stores which are doing business at a 28% same store sale clip. They have twice as many stores now than they did just 18 months ago. John Idol has warned for years of "normalization" but it just isn't' happening (yet!). He also said they are taking share from prominent European luxury goods makers (Prada, Louis Vuitton) and not just Coach!
Erinn Murphy from Piper Jaffray is right on the money when she says, "by the time KORS slows to "normalization" they will be earning $6 or more." 2015 should be another great year for KORS, and insiders cannot hurt us with secondary offerings.
I researched JAZZ and they have $588 million in cash and used $49 million last quarter to buy back stock. KORS will have over $1 billion in cash with no debt. Just think if they decide to buy back some shares...
Kimberly Greenberger - Morgan Stanley
Great. Thank you. Congratulations on a really fantastic quarter. John, I am wondering if you can step back for a second and just talk to us about how you think about investing behind the brand, to sustain the brand momentum over the longer-term.
It's obviously clear coming out of this quarter that there is a tremendous amount of recurring momentum, but just talk to us about how you think about managing the brand for the longer-term and what kind of infrastructure investments are you in process of making and do you expect to need to make over the next couple of years in order to be able to build this into a real sort of global brand powerhouse?
John Idol - Chairman, Chief Executive Officer and Director
Thanks. First off, good morning, Kimberley. Sustaining the momentum is something we obviously get up and think about every day of the week and we don't think about it just from a U.S. perspective. We think about it from a global perspective.
I think, I know many of you are following on things like Facebook and Twitter and Instagram and we think that continuing to build our platform socially is one of our priorities, because it gives us one of the greatest global reaches, so I would say that's probably our number one priority.
Our number two priority is development of our own website in-house. While everyone talks about the amount of sales transacted during the holiday season over the website and we certainly enjoyed that, Venezuela seeing, strong, strong, strong double-digit increases far in excess of what our comp store were, so obviously people are actively purchasing more online than they have in the past, but it is a place for people come to shop, and when you hear a lot about mall traffic being off and clearly that was the theme that you heard during the holiday season, what is happening, we believe is that people are actually shopping first online, doing the selection and then coming in, in many cases still in the stores
I know you follow IBD and KORS is now rated #17 stock as the RS line has improved dramatically. The firm has always had top notch fundamentals. IBD noted that Under Armour had triggered the "8 week hold rule" as it soared more than 20% in three weeks. KORS is also up more than 20% in the past four trading sessions! and the same rule applies to KORS (I have no intention of selling anyways).
I believe that stocks have personalities and KORS personality has changed as the earnings are accelerating and insiders do now own enough shares to hurt the stock much with another secondary. The big institutions are gobbling up shares, and the shorts are in a bad spot. This stock can run much further from here, and I expect it to if the market cooperates.
If a short liked KORS at $80 the must love it at $94? It would not surprise me to see the short shares increased when released next week as some shorts double down on stupidity. Short the same amount at $94 as you did at $80, and you only need to knock it down to $87 to get out even...
Michael Kors is opening its second retail store in South Carolina...
Michael Kors store coming to downtown Charleston
Posted: Feb 07, 2014 3:59 PM PST
Updated: Feb 07, 2014 4:01 PM PST
CHARLESTON, SC (WCSC) -
Downtown Charleston is getting a big name designer store.
Michael Kors is coming to King Street.
According to a spokesperson, design plans have been submitted to the city for the upscale clothing and accessory store to set up shop in the spot where BCBG is currently.
There were no details as to when the Michael Kors store will move in.
The new store would be the second one in the state for the retailer.