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Michael Kors (KORS) Q3 Earnings: Will the Momentum Stay?
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Michael Kors Holdings Limited is scheduled to report third-quarter fiscal 2017 results on Feb 7. In the last quarter, the company recorded a positive earnings surprise of 8%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
Michael Kors has a remarkable history, at least in terms of bottom line. The company continued with its positive earnings surprise streak for the sixth straight quarter, when it reported second-quarter fiscal 2017 results. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 9.5%. The current Zacks Consensus Estimate for the quarter is $1.63, reflecting a year-over-year growth of over 2%. Analysts polled by Zacks expect revenues of $1,355 million, down about 3% from the year-ago quarter.
Well the obvious question that comes to mind, will Michael Kors be able to continue with its positive earnings surprise streak in the third quarter. Well past trends do indicate toward that direction but it will not feasible to jump to a conclusion without analyzing the factors at play.
Michael Kors Holdings Limited Price, Consensus and EPS Surprise
Michael Kors has been constantly deploying resources to expand its product offerings, open new stores, build shop-in-shops along with upgrading its information system and distribution infrastructure. Management intends to upgrade its eCommerce platform and expects the channel to be a significant contributor in the long run. We note that despite the possibility of heavy investments weighing upon the margins in the short term, management continues to take up strategic endeavors. These are important in the light of competitive retail landscape, sluggish mall traffic and short-term challenges such as foreign currency headwinds.
Management had earlier forecast total revenue between $1.365 billion and $1.380 billion, and expects comparable sales to decline in the mid-single digit range in the third quarter. Management projected earnings in the range of $1.61 to $1.65 per share. For the quarter, operating expense as a percentage of total revenue is expected to be approximately 35.5%. Michael Kors foresees gross margin to be about 60.5%, while operating margin is expected to be approximately 25%.
What the Zacks Model Unveils?
Well our proven model does not conclusively show that Michael Kors is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Michael Kors has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.63. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Bottom Line
We do hope Michael Kors keeps its positive earnings surprise streak alive this quarter as well and contribute favorably to the sector’s performance. Per the latest Earnings Trends report as of Jan 27, Consumer Discretionary sector is likely to witness earnings growth of 4% and revenue increase of 13.2%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Marriott International, Inc. (MAR - Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank #2.
PVH Corp. (PVH - Free Report) currently has an Earnings ESP of +4.07% and a Zacks Rank #3.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Michael Kors (KORS) Q3 Earnings: Will the Momentum Stay?
Michael Kors Holdings Limited is scheduled to report third-quarter fiscal 2017 results on Feb 7. In the last quarter, the company recorded a positive earnings surprise of 8%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
Michael Kors has a remarkable history, at least in terms of bottom line. The company continued with its positive earnings surprise streak for the sixth straight quarter, when it reported second-quarter fiscal 2017 results. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 9.5%. The current Zacks Consensus Estimate for the quarter is $1.63, reflecting a year-over-year growth of over 2%. Analysts polled by Zacks expect revenues of $1,355 million, down about 3% from the year-ago quarter.
Well the obvious question that comes to mind, will Michael Kors be able to continue with its positive earnings surprise streak in the third quarter. Well past trends do indicate toward that direction but it will not feasible to jump to a conclusion without analyzing the factors at play.
Michael Kors Holdings Limited Price, Consensus and EPS Surprise
Michael Kors Holdings Limited Price, Consensus and EPS Surprise | Michael Kors Holdings Limited Quote
Factors at Play
Michael Kors has been constantly deploying resources to expand its product offerings, open new stores, build shop-in-shops along with upgrading its information system and distribution infrastructure. Management intends to upgrade its eCommerce platform and expects the channel to be a significant contributor in the long run. We note that despite the possibility of heavy investments weighing upon the margins in the short term, management continues to take up strategic endeavors. These are important in the light of competitive retail landscape, sluggish mall traffic and short-term challenges such as foreign currency headwinds.
Management had earlier forecast total revenue between $1.365 billion and $1.380 billion, and expects comparable sales to decline in the mid-single digit range in the third quarter. Management projected earnings in the range of $1.61 to $1.65 per share. For the quarter, operating expense as a percentage of total revenue is expected to be approximately 35.5%. Michael Kors foresees gross margin to be about 60.5%, while operating margin is expected to be approximately 25%.
What the Zacks Model Unveils?
Well our proven model does not conclusively show that Michael Kors is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Michael Kors has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.63. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Bottom Line
We do hope Michael Kors keeps its positive earnings surprise streak alive this quarter as well and contribute favorably to the sector’s performance. Per the latest Earnings Trends report as of Jan 27, Consumer Discretionary sector is likely to witness earnings growth of 4% and revenue increase of 13.2%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Lululemon Athletica Inc. (LULU - Free Report) currently has an Earnings ESP of +0.99% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Marriott International, Inc. (MAR - Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank #2.
PVH Corp. (PVH - Free Report) currently has an Earnings ESP of +4.07% and a Zacks Rank #3.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>