Michael Kors beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs below consensus; guides FY18 EPS below consensus, revs below consensus :
- Reports Q4 (Mar) earnings of $0.73 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.70; revenues fell 11.2% year/year to $1.06 bln vs the $1.05 bln Capital IQ Consensus.
- Comparable sales decreased 14.1%. On a constant currency basis, retail net sales grew 1.1%, and comparable sales decreased 13.6%.
- Total revenue in the Americas decreased 18.0% to $721.0 million on a reported basis, and decreased 18.3% on a constant currency basis.
- European revenue decreased 15.3% to $215.2 million on a reported basis, and declined 11.5% on a constant currency basis.
- Revenue in Asia increased 96.3% to $128.6 million on a reported basis, and increased 95.1% on a constant currency basis.
- During the fourth quarter, the Company repurchased 6,641,815 of the Company's ordinary shares for approximately $250.0 million in open market transactions. As of April 1, 2017, the Company had fully utilized the previously authorized amount under the share repurchase program
- On May 25, 2017, the Company's Board of Directors authorized a new $1 billion share repurchase program.
- In the fourth quarter of fiscal 2017 the Company recorded impairment charges of $193.8 million primarily related to underperforming lifestyle stores. In addition, the Company announced today that it intends to improve the profitability of its store fleet by closing between 100 and 125 of its full-price retail stores over the next 2 years. Over this time period, the Company expects to incur approximately $100 - $125 million of one-time costs associated with store closures. Collectively, the Company ultimately anticipates ongoing annual savings of $60 million as a result of store closures and the lower depreciation and amortization associated with these impairment charges.
- Co issues downside guidance for Q1, sees EPS of 0.61-0.64 vs. $0.81 Capital IQ Consensus Estimate; sees Q1 revs of 910-930 mln vs. $943.02 mln Capital IQ Consensus Estimate.
- Comparable sales decrease in the high-single digit range. Operating margin is expected to be approximately 13.0%.
- Co issues downside guidance for FY18, sees EPS of 3.57-3.67 vs. $3.96 Capital IQ Consensus Estimate; sees FY18 revs of 4.25 bln vs. $4.37 bln Capital IQ Consensus Estimate.
- Comparable sales to decrease in the high-single digit range. Operating margin is expected to be approximately 16.0%
- John D. Idol, the Company's Chairman and Chief Executive Officer, said, "Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels. In addition, our product and store experience did not sufficiently engage and excite consumers. We acknowledge that we need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products. Looking ahead, as we expand the fashion innovation in our accessories assortments, right-size our store fleet and elevate our store experience, fiscal 2018 will be a transition year in which we establish a new baseline before returning to long-term growth. We have a strong brand, led by Michael Kors, with a history of fashion innovation and leadership, a global footprint with stores positioned in the best locations around the world and the marketing expertise to effectively convey our fashion stories."
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