Tags: Michael Kors | stores | shut | close | Forecast

Michael Kors Gives Weak Forecast, to Shut 100 Stores

Michael Kors Gives Weak Forecast, to Shut 100 Stores
(AP)

Wednesday, 31 May 2017 10:41 AM

Michael Kors Holdings Ltd. gave a bleak full-year forecast and said it would shut more than 100 full-price retail stores in the next two years as the luxury fashion retailer struggles to turn around its brand.

Shares of the company, which also swung to a fourth-quarter loss, slumped more than 10 percent to $32.69, their lowest in more than five years.

Michael Kors, like other brick-and-mortar retailers, has been facing slowing sales as more customers shop online and spend less on apparel.

The once hugely popular brand posted double-digit sales growth until 2014, helped by the runaway success of its $300 bags. But then, its efforts to rapidly expand in North America - in a bid to sustain sales growth - made its handbags too commonplace for fashion-conscious women and consequently led to declining sales.

Kors shares have fallen nearly 16 percent this year.

The company said on Wednesday it expected revenue of $4.25 billion for fiscal year 2018 and also forecast a high single-digit drop in same-store sales.

Analysts on average had estimated revenue of $4.37 billion, according to Thomson Reuters I/B/E/S.

For the fourth quarter ended April 1, total sales fell 11.2 percent to $1.06 billion. Analysts had expected $1.05 billion.

Comparable-store sales fell 14.1 percent in the quarter, below analysts' estimate of 13.4 percent, according to research firm Consensus Metrix.

Net loss attributable to Michael Kors was $26.8 million, or 17 cents per share, in the latest quarter, compared with net income of $177 million, or 98 cents per share, a year earlier.

The company also booked non-cash impairment charges of $193.8 million related to its underperforming full-price retail stores.

Excluding certain items, the company earned 73 cents per share, while analysts had expected 70 cents per share.

Michael Kors also said it would buy back $1 billion of shares.

© 2019 Thomson/Reuters. All rights reserved.

   
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Michael Kors Holdings Ltd gave a bleak full-year forecast and said it would shut more than 100 full-price retail stores in the next two years as the luxury fashion retailer struggles to turn around its brand.
Michael Kors, stores, shut, close, Forecast
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2017-41-31
Wednesday, 31 May 2017 10:41 AM
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