Michael Kors tanks after missing on sales and seeing comparable sales down in low-single digits
- Michael Kors beat on profits but missed on sales.
- Its same-store sales dropped 2.1%, mostly due to a decline in the European market.
- The company boosted its earnings guidance but said it expects its full-year same-store sales to decline in the low-single digits.
- Watch Michael Kors trade live.
Michael Kors tumbled 11% before Wednesday's opening bell after the retailer reported disappointing second-quarter sales, and said its full-year same-store sales will decline in the low-single digits.
The fashion group said it generated $1.25 billion sales, missing the $1.26 billion that was expected by analysts, according to Bloomberg data. Meanwhile, its same-store sales decreased 2.1%, mostly due to a decline in the European market.
Its bottom line came at $1.27 adjusted earnings per share, beating the $1.10 that was expected by Wall Street.
“We are pleased to report results that have again exceeded our expectations," said CEO John Idol in a press release.
"As we enter the second half of fiscal 2019 we look forward to welcoming Versace into our group. With the acquisition of Versace we have built one of the world's leading fashion luxury groups in just one year, setting the stage for accelerated revenue and earnings growth. This is a truly remarkable and historic moment for our company and we look forward to completing this transformational acquisition in the coming months."
Looking ahead, the global fashion brand boosted its earnings guidance to a range between $4.95 and $5.05, up $0.05 from its previous forecast. But, the company said its comparable store sales are expected to be down in the low-single digits, primarily driven by an unfavorable foreign currency impact.
In September, Michael Kors has agreed to buy the Italian fashion house Versace for 1.83 billion euros ($2.12 billion), and said it will change its name to Capri Holdings once the deal closes. At the time. the company said it expects the acquisition of Versace to be "dilutive to earnings per share in the high-single digits in fiscal 2020, accretive in the low-single digits in fiscal 2021, and accretive in the high-single digits in fiscal 2022."
Shares were down 21% this year through Tuesday.
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