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On Aug 9, 2013, Zacks Investment Research upgraded Michael Kors Holdings Limited (KORS - Analyst Report) to a Zacks Rank #1 (Strong Buy). Shares of this specialty retailer of apparel and accessories have amassed an impressive year-to-date return of roughly 40%.

Why the Upgrade?

Michael Kors has been witnessing rising earnings estimates on the back of better-than-expected first-quarter fiscal 2014 results. The impressive results were attributable to robust demand of the company’s luxury brand coupled with a jet-set luxury in-store experience. Strength was witnessed across all divisions and geographies.

The company declared first-quarter results on Aug 6, 2013, wherein earnings of 61 cents a share surpassed the Zacks Consensus Estimate of 49 cents by 24.5% and surged 79.4% from 34 cents earned in the year-ago quarter. Including the quarter under review, the company in the past 7 quarters has outperformed the Zacks Consensus Estimate by an average of 50.6%. Additionally, the company’s long-term estimated EPS growth rate is 27%.

Michael Kors’ total revenue soared 54.5% to $640.9 million in the quarter from $414.9 million in the year-ago period, and also came ahead of the Zacks Consensus Estimate of $572 million. Gross profit jumped 58.3% to $397.3 million, whereas gross margin expanded 150 basis points to 62%.

Buoyed by sturdy results, management now anticipates fiscal 2014 revenue between $2.8 billion and $2.9 billion on the back of expected comparable-store sales growth of 20%. Earnings are projected in the band of $2.67 to $2.69 per share.

Earlier, the company had anticipated revenue in the range of $2.65 billion to $2.75 billion with comparable-store sales growth in the band of 15% to 20%. Management had previously forecasted earnings between $2.43 and $2.47 per share for the fiscal year.

The better-than-expected results and an upbeat guidance triggered an uptrend in the Zacks Consensus Estimates, as analysts become more constructive on the stock’s future performance. This is evident from the movement witnessed in the Zacks Consensus Estimate that surged 7% to $2.75 for fiscal 2014 and 5.8% to $3.31 per share for fiscal 2015 in the past 7 days.

Other Stocks to Consider

Apart from Michael Kors, there are other stocks with a favorable Zacks Rank, which are capable of continuing with their upbeat performances. These include Hanesbrands Inc. (HBI - Analyst Report), Jack in the Box Inc. (JACK - Snapshot Report) and hhgregg, Inc. (HGG - Analyst Report), all of which carry Zacks Rank #1 (Strong Buy).

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