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Michael Kors (KORS) Q3 Earnings: Is a Beat in the Cards?
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Michael Kors Holdings Limited is scheduled to report third-quarter fiscal 2018 results on Feb 7. In the last quarter, the company delivered a positive earnings surprise of 60.2%. Let’s see how things are shaping up prior to this announcement.
Michael Kors has a remarkable history, at least in terms of the bottom line. The company’s second-quarter fiscal 2018 results marked its positive earnings surprise streak for the tenth consecutive quarter. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 23.7%.
Well the obvious question that comes to mind, will Michael Kors be able to sustain its positive earnings surprise streak in the third quarter. Notably, the past trends do indicate toward that direction but it will not be wise to jump to a conclusion without analyzing the factors at play.
The current Zacks Consensus Estimate for the quarter is $1.29, reflecting a year-over-year decline of over 21.3%. Analysts polled by Zacks expect revenues of $1,375 million, up nearly 2% from the year-ago quarter.
Factors at Play
Michael Kors has been constantly deploying resources to expand product offerings, open new stores, and build shop-in-shops along with upgrading information system and distribution infrastructure. Management intends to upgrade e-commerce 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, the company continues to take up strategic endeavors.
Further, Michael Kors Runway 2020 strategic plan, which focuses on product innovation, brand engagement and customer experience, is likely to drive the top line. The company had earlier launched Bancroft in the Michael Kors collection line as part of its strategy of product innovation. This strategy aided the global Women's footwear comparable sales to increase by double digit in the preceding quarter.
However, stiff competition, falling comps, aggressive promotional environment and waning mall traffic are making things tough. We noted that comparable sales dipped 1.8% in the second quarter of fiscal 2018, following declines of 5.9% in the preceding quarter. We noted that comps had declined 14.1%, 6.9%, 5.4% and 7.4% in the fourth, third, second and first quarters, respectively. In fiscal 2018, the company continues to anticipate comparable sales to decrease in the mid-single digit range.
Michael Kors Holdings Limited Price, Consensus and EPS Surprise
Our proven model shows that Michael Kors is likely to beat estimates this quarter as the stock has the right combination of two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.
Michael Kors has an Earnings ESP of +1.61% and carries a Zacks Rank #2. This makes us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks with Favorable Combination
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:
G-III Apparel Group, Ltd. (GIII - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #2.
Tiffany has an Earnings ESP of +0.89% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7% and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Michael Kors (KORS) Q3 Earnings: Is a Beat in the Cards?
Michael Kors Holdings Limited is scheduled to report third-quarter fiscal 2018 results on Feb 7. In the last quarter, the company delivered a positive earnings surprise of 60.2%. Let’s see how things are shaping up prior to this announcement.
Michael Kors has a remarkable history, at least in terms of the bottom line. The company’s second-quarter fiscal 2018 results marked its positive earnings surprise streak for the tenth consecutive quarter. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 23.7%.
Well the obvious question that comes to mind, will Michael Kors be able to sustain its positive earnings surprise streak in the third quarter. Notably, the past trends do indicate toward that direction but it will not be wise to jump to a conclusion without analyzing the factors at play.
The current Zacks Consensus Estimate for the quarter is $1.29, reflecting a year-over-year decline of over 21.3%. Analysts polled by Zacks expect revenues of $1,375 million, up nearly 2% from the year-ago quarter.
Factors at Play
Michael Kors has been constantly deploying resources to expand product offerings, open new stores, and build shop-in-shops along with upgrading information system and distribution infrastructure. Management intends to upgrade e-commerce 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, the company continues to take up strategic endeavors.
Further, Michael Kors Runway 2020 strategic plan, which focuses on product innovation, brand engagement and customer experience, is likely to drive the top line. The company had earlier launched Bancroft in the Michael Kors collection line as part of its strategy of product innovation. This strategy aided the global Women's footwear comparable sales to increase by double digit in the preceding quarter.
However, stiff competition, falling comps, aggressive promotional environment and waning mall traffic are making things tough. We noted that comparable sales dipped 1.8% in the second quarter of fiscal 2018, following declines of 5.9% in the preceding quarter. We noted that comps had declined 14.1%, 6.9%, 5.4% and 7.4% in the fourth, third, second and first quarters, respectively. In fiscal 2018, the company continues to anticipate comparable sales to decrease in the mid-single digit range.
Michael Kors Holdings Limited Price, Consensus and EPS Surprise
Michael Kors Holdings Limited Price, Consensus and EPS Surprise | Michael Kors Holdings Limited Quote
What the Zacks Model Unveils
Our proven model shows that Michael Kors is likely to beat estimates this quarter as the stock has the right combination of two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.
Michael Kors has an Earnings ESP of +1.61% and carries a Zacks Rank #2. This makes us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks with Favorable Combination
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:
Ross Stores (ROST - Free Report) has an Earnings ESP of +2.45% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
G-III Apparel Group, Ltd. (GIII - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #2.
Tiffany has an Earnings ESP of +0.89% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7% and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>