Investor sentiment is no more inclined toward Michael Kors Holdings Limited that has lost its sheen in the bourses. Shares of this designer, marketer, distributor and retailer of branded women’s apparel and accessories have declined roughly 12.8% in the past six months, underperforming the Zacks categorized Consumer Discretionary sector, which has gained 7.9% in the same time frame. Moreover, analysts are skeptical about this Zacks Rank #4 (Sell) stock, as evident from a declining Zacks Consensus Estimate.
So, what is hurting the stock? Analysts pointed to the macroeconomic factors such as cautious consumer spending, sluggish mall traffic and fall in tourism along with aggressive promotional environment, foreign currency fluctuations and other geopolitical issues as the primary headwinds plaguing the company.
Further, analysts are worried about margins in the near term due to heavy investments in new store openings, expansion of the existing outlets and international operations, digital flagships as well as global infrastructure. These initiatives will help reap benefits in the long run.
The stock also came under pressure following Michael Kors’ second-quarter fiscal 2017 results, wherein both the top and bottom lines declined 3.7% and 6% year over year, respectively. As a result, management lowered its fiscal 2017 projection. The company envisions fiscal 2017 total revenue to be about $4.55 billion and earnings in the band of $4.37–$4.43 per share. Earlier, management had projected revenue to be about $4.71 billion and earnings in the range of $4.56–$4.64. All these triggered a downtrend in the Zacks Consensus Estimate.
In the past 60 days, the Zacks Consensus Estimate of $4.40 for fiscal 2017 and $4.48 for fiscal 2018 has declined 17 cents and 31 cents, respectively. Moreover, the Zacks Consensus Estimate for the third quarter has dropped 15 cents to $1.62 in the same time frame.
So for time being you can shift your focus from Michael Kors to other better-ranked stocks.
Stocks to Consider
Better-ranked stocks in the retail sector include Best Buy Co., Inc. (BBY - Free Report) , The Children's Place, Inc. (PLCE - Free Report) and Burlington Stores, Inc. (BURL - Free Report) , all flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Best Buy delivered an average positive earnings surprise of 25.7% in the trailing four quarters and has a long-term earnings growth rate of 11.9%.
The Children's Place delivered an average positive earnings surprise of 36.3% in the trailing four quarters and has a long-term earnings growth rate of 10.3%.
Burlington Stores delivered an average positive earnings surprise of 25.6% in the trailing four quarters and has a long-term earnings growth rate of 19.9%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Investor sentiment is no more inclined toward Michael Kors Holdings Limited that has lost its sheen in the bourses. Shares of this designer, marketer, distributor and retailer of branded women’s apparel and accessories have declined roughly 12.8% in the past six months, underperforming the Zacks categorized Consumer Discretionary sector, which has gained 7.9% in the same time frame. Moreover, analysts are skeptical about this Zacks Rank #4 (Sell) stock, as evident from a declining Zacks Consensus Estimate.
So, what is hurting the stock? Analysts pointed to the macroeconomic factors such as cautious consumer spending, sluggish mall traffic and fall in tourism along with aggressive promotional environment, foreign currency fluctuations and other geopolitical issues as the primary headwinds plaguing the company.
Further, analysts are worried about margins in the near term due to heavy investments in new store openings, expansion of the existing outlets and international operations, digital flagships as well as global infrastructure. These initiatives will help reap benefits in the long run.
The stock also came under pressure following Michael Kors’ second-quarter fiscal 2017 results, wherein both the top and bottom lines declined 3.7% and 6% year over year, respectively. As a result, management lowered its fiscal 2017 projection. The company envisions fiscal 2017 total revenue to be about $4.55 billion and earnings in the band of $4.37–$4.43 per share. Earlier, management had projected revenue to be about $4.71 billion and earnings in the range of $4.56–$4.64. All these triggered a downtrend in the Zacks Consensus Estimate.
In the past 60 days, the Zacks Consensus Estimate of $4.40 for fiscal 2017 and $4.48 for fiscal 2018 has declined 17 cents and 31 cents, respectively. Moreover, the Zacks Consensus Estimate for the third quarter has dropped 15 cents to $1.62 in the same time frame.
So for time being you can shift your focus from Michael Kors to other better-ranked stocks.
Stocks to Consider
Better-ranked stocks in the retail sector include Best Buy Co., Inc. (BBY - Free Report) , The Children's Place, Inc. (PLCE - Free Report) and Burlington Stores, Inc. (BURL - Free Report) , all flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Best Buy delivered an average positive earnings surprise of 25.7% in the trailing four quarters and has a long-term earnings growth rate of 11.9%.
The Children's Place delivered an average positive earnings surprise of 36.3% in the trailing four quarters and has a long-term earnings growth rate of 10.3%.
Burlington Stores delivered an average positive earnings surprise of 25.6% in the trailing four quarters and has a long-term earnings growth rate of 19.9%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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