Having Michael Kors in Your Core Holdings Is a No-Brainer
Michael Kors delivered a stellar quarter and hit $1 billion in quarterly sales for the first time. The luxury goods maker sold $1.01 billion worth of handbags, high-end clothing, and accessories during the last quarter. The flamboyant retailer not only managed to handily beat the consensus revenue estimate of $859 million but also saw its top line expand an astounding 59%, snapping a four-quarter run of slowing growth. Its gross margin also expanded 100 basis points to hit 61.2%.
Its luxury goods peer Coach had a less illustrious quarter. Although there are investor concerns that Michael Kors shares are pricey, trading at a 12-month trailing P/E ratio of around 33, which is almost double Coach's 12 month-trailing P/E ratio of 17, and far above peers Fossil Group (with 12-month trailing P/E ratio of 20) and Jones Group (with a P/E of 19.)