Thursday, 30 April 2015
michael kors Handbags seems to be edging out the competition, particularly Coach.In North America alone
Analysts expect michael kors Bags sale to grow revenue by 28% in the quarter. If Chen's estimates are accurate, it would set Michael Kors up for a meaningful earnings beat in early February. The reason is because 25% of Michael Kors' revenue now comes from international markets, Europe and Japan, both of which saw sales increase more than 100% during the company's last quarter on a year-over-year basis. Thus, if sales can grow 30% in North America and double in international markets, KORS would be well positioned for big stock gains.They have no size, no age. You could feel you are having a fat day, and you can still wear accessories,' he said.And when it comes to selling well-priced luxury goods, compared to house's like Louis Vuitton and Hermes, Michael Kors seems to be edging out the competition, particularly Coach.In North America alone, sales grew figure 25per cent; in Europe, 56per cent.
First, investors should keep in mind that Chen's analysis and channel checks are historically very accurate. He not only predicted strong and growing demand for Michael Kors in years past, but also the demise of Coach in North America. Last week Chen's survey suggested that michael kors discount saw 30% growth from October through December, with 72% of the respondents saying that sales increased versus last year.“Analysts should not be comparing us to just one company, and be looking instead at the fact we are outperforming rivals on a global scale.”The company said it would continue to spend heavily on opening new stores and in-store shops, as well as investing in distribution operations.We delivered best-in-class results, not only when compared to those of other retailers but crucially when compared to other luxury players,” said chief executive John Idol.
Moreover, the company is taking its world-class assortments to global customers with the aggressive rollout of its e-commerce sales channel. In this regard, its website is doing pretty well thus far; for 3QFY15, KORS' website generated 73% more sales than the previously outsourced site. The company sees a lot of growth potential in the rapidly growing online sales channel. In efforts to cater to the growth potentials of online sales,michael kors women will take its e-commerce business to Canada over the next few months, followed by Europe and Japan in Calendar Year 2016. I believe the growing e-commerce sales channel will not only expand the company's global market share, but will also better its long-term growth potentials.I believe that in the near term, the combined effect of all above-mentioned growth initiatives will keep KORS' margins pressurized due to escalated investment burden.
An increase in promotional spending by peers like Coach (NYSE:COH) has pressurized KORS' handbag sales. For the first quarter of calendar year 2015, KORS' hand bag sales decreased by 23%. Owing to this slowdown in sales, the company accelerated its handbag category launches under the lead of Michael and his design team. michael kors Bags online is trying to strengthen its position in the category by launching small-or-medium-sized handbags, which are sold at relatively lower prices than large bags.In addition to store expansion, the company is working to extend the product range of its well-known business segments like handbags and watches. Owing to KORS' attractive handbag range, being offered at reasonable prices, upper income U.S. teens prefer them over its peers. By the end of fall 2014, KORS held the highest share in the handbag category, as shown in the chart below.