Michael Kors shares slump on handbag sales hit

Michael Kors CEO We're Actively Looking At M&A Options

The Michael Kors Holdings Limited (KORS) to Release Earnings on Tuesday

In all for the third quarter, Michael Kors reported a profit of $271.3 million, or $1.64 a share, down from $294.6 million, or $1.59 a share, a year earlier.

Michael Kors Holdings (KORS) reported third quarter EPS of $1.64 Tuesday morning, compared to $1.59 a year ago.

Michael Kors Holdings Limited (NYSE:KORS) posted earnings of $0.95/Share in the previous quarter, as compared to earnings of $0.88/share estimated by analysts.

The company also released its fourth quarter guidance, expecting earnings per share of $0.68-$0.72 on revenues of $1.035 billion to $1.055 billion.

Michael Kors now envisions fiscal 2017 total revenue to be approximately $4.48 billion and expects comparable sales to decrease in the high-single digit range. But Q3 revenue declined 3.2% YOY to $1.35 billion, missing analysts' estimates of $1.36 billion. Revenues fell 3.2 percent to $1.35 billion, with constant currency revenues down a more modest 2.6 percent.

Michael Kors is trying to trim its dependence on department stores, where a lack of customers has resulted in the use of discounts that hurt the designer's margins and brand image.

Gross margin was at 59.6 percent, nearly flat with last year's 59.5 percent.

US fashion label Michael Kors' total revenue decreased 3.2 percent in the third quarter of fiscal 2017. Corporate insiders own 5.00% of the company's stock. Further, Michael Kors stated that headwinds in the aforementioned market will continue throughout the Spring season primarily due to sluggish mall traffic, currency fluctuation and uncertainty surrounding certain political changes in European countries.

Comparable sales fell 6.9 percent in the third quarter ended December 31.

Revenue in the Americas region fell 7.4 percent, while Europe sales were down 7 percent.

Michael Kors' market capitalization fell to $6.1 billion today from $6.8 billion yesterday.

CEO John Idol said results were "in line with expectations", but also said the company "was disappointed by North American and European comparable sales performance". Thus the company showed an Earnings Surprise of 8 Percent. The price moves in Michael Kors Holdings Limited post earnings have produced an average increase of 5.94% and an average increase of 9.15% on next day and seventh day, sequentially. The stock traded with the volume of 2.87 Million shares in the last trading session. Following the completion of the sale, the senior vice president now directly owns 6,843 shares in the company, valued at approximately $328,600.86. Adjusted diluted earnings per share should now fall in the range of $4.15 to $4.19 on a non-GAAP basis, excluding one-time costs.

Kate Spade now trades at 11.4 times enterprise value to Ebitda and Michael Kors trades at 5.6 times EV/Ebitda, according to FactSet data.

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