Michael Kors, the owner of Jimmy Choo, reported first quarter results on Wednesday sending shares of the luxury retail company higher to a new 52-week high.
Traders were also enthused to learn that the company boosted its earnings outlook for the full year. Michael Kors Management revealed on its earnings call that traffic is even up at department stores, as “the declines that we had seen previously are beginning to become mitigated.”
For the full year, the company has forecast earnings in the range of $4.90 to $5 a share. This is a boost of 25 cents from the previous forecast.
“Our data show an elevated level of spending on luxury products thanks to tax cuts and bonuses, which have boosted consumer finances,” GlobalData Retail Managing Director Neil Saunders said on Wednesday.
“Michael Kors has been a beneficiary of this, especially in categories like accessories, footwear, and women’s outerwear.”
“Even branded apparel companies have noted in their most recent quarterly results that they are experiencing higher [sales] at wholesale as a result of clean inventory and appealing product assortments, while healthy domestic consumer demand is supporting strength at retail,” Telsey Advisory Group analyst Dana Telsey wrote in a note this week.
Michael Kors reported quarterly earnings of $1.32 per share for the first quarter. This beat analysts’ estimates of 94 cents. It was also higher than the $0.80 per share a year ago.
Over the last four quarters, Michael Kors has surpassed consensus EPS estimates four times.
Disclaimer: We have no position in Michael Kors Holdings Ltd. (NYSE: KORS) and have not been compensated for this article.