Michael Kors (KORS) 3Q15 Results: Inflection in Comps Driven by Better Conversion

Executive Summary

• Michael Kors’ 3Q15 EPS was $1.59 versus consensus of $1.46.
• Total revenue in the Americas increased by 0.4%, to $1.06 billion. European revenue grew by 14.3%, to $276.0 million, and revenue in Japan increased by 59.1%, to $25.5 million.
• Comps were down 0.9% in the period versus guidance that called for a mid-single-digit decline and consensus of (4.4)%. Comp trends improved sequentially.
• Management provided 4Q15 guidance for EPS of $0.93–$0.97 versus consensus of $1.00. Comps are expected to be flat and total revenues are expected to be $1.13–$1.15 billion versus consensus of $1.16 billion.