Michael Kors Is Poised for a Great Quarter

Michael Kors (NYSE: KORS  ) will announce its earnings for 2014's fourth quarter on May 28, 2014. The luxury designer and retailer reported a great prior quarter with net income of $229.6 million, earnings per share of $1.11, and revenue of $1.0 billion. The income, EPS, and revenue numbers represented increases of 77%, 73.4%, and 59%, respectively, over the prior year's quarter.

In light of the results reported by Coach (NYSE: COH  ) , it looks like Kors is taking more market share from its rival, while Kate Spade (NYSE: KATE  ) is grabbing market share from Coach as well. Moreover, the popularity and futures of these companies are evident in their social-media followings and the number of searches they command on Google. Kors leads the way in that respect over both Coach and Kate Spade.

Michael Kors dominates in social media and search
Michael Kors is the dominant player on both Twitter and Facebook in comparison with its competitors, Coach and Kate Spade. Coach has 5.22 million likes on Facebook and Kate Spade has 1.48 million . Michael Kors, however, has 13.59 million likes on Facebook . Kors is by far the more-popular and more-followed brand compared to Coach or Kate Spade on Facebook. Kors has more likes than its other two competitors combined. On Twitter, Michael Kors also reigns supreme. Coach is followed by 548,000 users and Kate Spade is followed by 605,000 . Almost 2 million users, 1.98 million as of this writing, follow Michael Kors on Twitter . Once again, Kors garners more interest on Twitter like it does on Facebook, with more followers than Coach and Kate Spade combined.

Michael Kors generates more searches on Google than its other two competitors as well. Kors was the second most-searched luxury fashion brand in 2013. Kate Spade ranked fifth, while Coach was not in the top ten . In the past twelve months, Kors has been trending higher on Google than Kate Spade, as the chart below shows. I did not include Coach as "coach" is an ubiquitous term that sees use in other contexts and does not just refer to a luxury-fashion brand.

Source: Google Trends

The chart is normalized so all values are compared to its highest point, which Michael Kors held in around January of 2014. The uptrend in Michael Kors searches around that time most likely resulted from the popularity of Kors during the holiday season, which resulted in its stellar earnings and revenue for that period. It can also be deduced from the chart that Kate Spade has been relatively flat and did not realize a significant uptick in search volume during the holidays. It's apparent that Michael Kors is more popular not just on Facebook and Twitter but on Google as well.

The upcoming quarter
Kors expects its 2014 fourth-quarter revenue to be between $790 million and $800 million, and its resulting EPS to be between $0.63 to $0.65. Kors also believes its same-store sales will increase by between 15% and 20%. The company beat its own estimates last quarter though and increased its same-store sales 28% over the prior year's quarter. Michael Kors is also expanding its retail store base, and this should add to its sales this quarter. Kors has a big opportunity to expand abroad in addition to more expansion in North America. Its revenue in North America rose 51% in the third quarter and its revenue in Europe rose a hefty 144%. In all of its other regions, Kors' revenue grew by 54% in 2014's third quarter compared to the 2013 quarter.

Foolish takeaway
Michael Kors is wildly popular and profitable in North America and is growing its presence in Europe, Asia, and other markets. The company's products also trend well on Google, Facebook, and Twitter on an absolute basis and relative to its high-fashion peers Kate Spade and Coach. Michael Kors is also a financially sound company and carries no long-term debt on its balance sheet. Past results and popularity on social media and Google should lead to Michael Kors reporting another stellar quarter.

You won't be using your credit card at Michael Kors, Coach, or Kate Spade anymore
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2959832, ~/Articles/ArticleHandler.aspx, 9/23/2014 10:34:20 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement