Image source: Michael Kors.

For a long time, shares of luxury retailer Michael Kors Holdings (NYSE:CPRI) have been under pressure. The fickle whims of fashion started moving against the company in early 2014, and since then, the stock has lost more than half its value. Yet Kors hasn't given up on its market, and coming into Wednesday's fiscal fourth-quarter financial report, investors were actually hoping for solid growth in sales and earnings per share. The retailer delivered even more than most shareholders had expected on that front, and the combination of the finalization of the acquisition of its China licensee and a new buyback program gave investors more good news. Let's look more closely at the latest results from Michael Kors Holdings to see if a turnaround is truly in the cards for the company's future.

How Kors kept turning things around

Michael Kors' fourth-quarter results continued to build momentum from the company's past quarters. Total revenue was up almost 11% to $1.2 billion, which was quite a bit better than the 6% growth that investors had expected to see. Net income fell 3% to $177 million, but a big drop in outstanding share count produced earnings of $0.98 per share. That was a nice gain from last year's $0.90 per share and was also $0.01 ahead of consensus forecasts among those following the stock.

A closer look at the numbers shows further progress on Kors' turnaround efforts. Comparable sales were up 0.3%, and although that looks quite tepid, it was the first time in more than a year that Kors has earned a positive figure on that metric. Retail net sales jumped 22%, thanks largely to e-commerce and store expansion efforts. Currencies continued to have a negative impact on Kors' numbers, but only by slightly more than a single percentage point on sales and comps. Wholesale net sales rose at a slower 3.5% pace, and the small amount of revenue that Kors gets from licensing fell by 14% from year-ago levels.

As we've seen in past periods, Kors kept doing better outside the U.S. market. Revenue in the Americas rose less than 5%, but European sales were up 16%, and Asian revenue more than tripled from year-ago levels. The strong dollar weighed against the business in Europe, but even stronger currencies in the Asian region actually led to a slight reduction in the growth rate for that area when measured on a constant currency basis.

CEO John Idol was happy with the progress that Kors has made. "We elevated our product offers and refreshed our marketing campaigns, both of which were met with positive response from our customers," the CEO said, and "we also continued to make strategic investments in our business that will pay meaningful dividends for years to come."

Can Kors keep moving higher?

Kors thinks that there's plenty of upside left for the company and its stock. Idol sees several opportunities for growth, "including the expansion of our international markets, the growth of our digital e-commerce flagships, the build-out of our men's business, the launch of Michael Kors ACCESS wearable technology line, and the continued design innovation of our luxury fashion product."

One big strategic move involves the acquisition of Kors' greater China licensee. The $500 million cash deal fully integrates the efforts that the formerly independent company has made in promoting the Kors brand in China and the surrounding region.

In addition, Kors announced a big expansion in its share repurchase program. The company replaced its existing program, on which roughly $360 million was still available, with a new $1 billion program. CFO Joseph Parsons said that the authorization demonstrates Kors' belief in its future outlook.

Longtime Kors shareholders were prepared for relatively lackluster guidance that Kors usually gives, and so what the company actually said was somewhat of a positive surprise. For the fiscal first quarter, Kors believes that revenue will come in between $940 million and $950 million, with adjusted earnings of $0.70 to $0.74 per share and comps in the negative mid-single-digit percentage range. Both figures are less than what investors came into the report expecting to see. But for the full fiscal year, Kors thinks comps will fall by low-single-digit percentages, and adjusted earnings will be $4.56 to $4.64 per share. Those earnings would be higher than the $4.50-per-share consensus forecast, showing long-term optimism from Kors.

Kors stock immediately climbed, rising 7% in pre-market trading following the announcement. As long as the company can follow through with eventual full-year gains, investors are likely to forgive Kors even if the early part of the new fiscal year turns out to be as sluggish as the company currently expects.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.