New accessories fuel growth at Michael Kors

The opening of more than 100 stores in the third quarter helped Michael Kors increase revenues, although same-store sales were more moderated.



Michael Kors Holdings Limited announced its financial results for the fiscal 2016 third quarter ended Dec. 26, and revenue increased 9.9%. Retail net sales increased 15.5% to $766.2 million driven primarily by e-commerce sales from the company's digital flagships and 114 net new store openings since the end of the third quarter of fiscal 2015. Same-store sales increased 2%. Net income was $294.6 million, or $1.59 per diluted share.



“We are pleased with our third quarter results, as we delivered revenue, comparable store sales and earnings growth ahead of our expectations," said John D. Idol, the company’s chairman and CEO. "Our performance was driven primarily by strong consumer response to our luxury fashion product offering, particularly in our accessories and footwear categories, the continued momentum in our digital flagship business and outstanding growth in our international markets. As we look ahead, we are excited about our upcoming Spring collections that embody design innovation and underscore Michael Kors fashion leadership. In addition, we remain focused on further developing our digital flagship strategy as we offer our customers a seamless omnichannel experience, the build-out of our men’s business, and leveraging our strong brand awareness to expand our business globally. We believe that the continued execution of these strategic initiatives positions us well to deliver long-term growth.”



As of Dec. 26,, the company operated 623 retail stores, including concessions, compared to 509 retail stores, including concessions, at the end of the same prior-year period. The company had 234 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 857 Michael Kors stores worldwide at the end of the third quarter of fiscal 2016.



For the fourth quarter of fiscal 2016, the company expects total revenue to be in the range of $1.13 billion to $1.15 billion. The company expects same-store sales to be flat on a reported basis and to increase in the low single digits on a constant currency basis.