Michael Kors posts higher Q4 revenue

Worldwide
Published:  01 June, 2018

The U.S. headquartered fashion Group has posted a +10.8% increase in revenue for the fourth quarter of 2018 but the cautious outlook for 2019 has failed to impress market analysts, with shares declining -6% upon the announcement of results on May 30.

Michal Kors’ total revenue increased +10.8% in the fourth quarter of 2018 to US$1.18 billion, including a US$107.9 million contribution from Jimmy Choo. On a constant currency basis, total revenue increased +7.2%. Retail revenue for the Michael Kors brand increased +4.4% to US$600.6 million, with comparable sales up +2.3%, driven by growth in the accessories, footwear, ready-to-wear and men's categories, while wholesale revenue decreased -3.2% to US$441.3 million. Adjusted gross profit increased +14.9% to US$712.3 million, and as a percentage of total revenue was 60.4%.

For the fiscal year ending March 31, 2018, total revenue increased +5% to US$4.72 billion from US$4.49 billion, including a US$222.6 million contribution from Jimmy Choo. On a constant currency basis, total revenue increased +3.6%.

For the first quarter of fiscal 2019, the Group expects total revenue to be approximately US$1.135 billion, including between US$140-145 million of incremental Jimmy Choo revenue. Comparable sales for Michael Kors are expected to be approximately flat.

“Looking to fiscal 2019, we have a number of initiatives planned to drive growth in both of our luxury brands. For Michael Kors, we expect growth to be led by our retail business, as we remain focused on executing initiatives across fashion luxury product, brand engagement and customer experience. For Jimmy Choo, we will continue to make strategic investments to expand our retail fleet globally, capitalise on the significant opportunity to grow our accessories business and increase brand engagement through glamorous red-carpet marketing communications”, said John D. Idol, Chairman and CEO, Michael Kors, adding they will “continue to explore acquisitions” to complement the existing luxury portfolio.