Why Michael Kors Shares Popped (KORS)

Why Michael Kors Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of apparel retailer Michael Kors Holdings (NYSE: KORS ) climbed 15% today after its quarterly results and outlook easily topped Wall Street estimates.

So what: The stock has been volatile in recent months on concerns over a cutback in global consumer spending, but a wide first-quarter beat -- EPS of $0.34 versus the consensus of just $0.20 -- coupled with blowout guidance for 2013, is quickly easing those worries. In fact, quarterly same-store sales in Europe and North America surged 24% and 38%, respectively, while gross margins widened, giving investors plenty of optimism about the company's brand appeal going forward.

Now what: Management now sees full-year EPS of $1.32-$1.34 on revenue of $1.8 billion-$1.9 billion, up nicely from its prior view of $1.08-$1.12 and $1.7 billion-$1.8 billion, respectively. "Overall, we are extremely excited about the long term growth potential of our Company as we continue to build upon the success we achieved in establishing Michael Kors as a global luxury lifestyle brand," said Chairman and CEO John Idol. Of course, with the stock now up nearly 150% since its December IPO and trading at a forward P/E of 30, much of that growth might already be baked into the price.

Interested in more info on Michael Kors? Add it to your watchlist.

More Expert Advice from The Motley Fool

Michael Kors is one of today's hottest high-end fashion brands, and that's translated into one of the best performing stocks in retail - since its debut on the market in late 2011, the share price has more than doubled. But with all that growth, has the stock finally become too expensive, or is there still room left to run? The Motley Fool's new premium report on Michael Kors gives investors all the information they need to make the right decision. We cover the key must-watch areas, opportunities, and threats to the company that investors need to know. To claim your copy, simply click here now for instant access.

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