The retail industry is gearing up for the all-important holiday shopping season, and luxury retailer Michael Kors Holdings (NYSE:KORS) wants to take full advantage of the opportunity to build positive momentum for its business. Now that Kors has acquired Jimmy Choo, the stock has finally generated some excitement, reaching its best levels of the year and signaling hopes for better times ahead.

Coming into Monday's fiscal second-quarter financial report, Kors investors had actually been prepared to deal with further declines in the retailer's top and bottom lines. Yet Kors was able to do a lot better than that, and the company laid out a game plan that it hopes to use to move forward even more aggressively with its turnaround efforts. Let's look more closely at how Michael Kors did and what the retailer sees in its future.

Michael Kors location at Rockefeller Plaza, New York City.

Image source: Michael Kors.

Smart buy for Michael Kors

Michael Kors' fiscal second-quarter results looked impressive. Revenue jumped by more than 5% to $1.15 billion, beating the consensus forecast among those following the stock by more than $100 million. Adjusted net income climbed at an even more attractive 25% rate to $204.5 million, and the resulting $1.33 per share in adjusted earnings far surpassed the $0.83 per share that most analysts were looking to see.

Kors is still dealing with some mixed fundamental performance. On one hand, retail net sales were up 8%, with the company citing strong e-commerce-related sales in Europe and Asia for a substantial portion of the increase. New-store openings also played a key role, with 56 net new stores bringing in sales. Yet on the downside, comparable sales were down 1.8%, extending a long streak of negative performance despite narrowing the decline significantly from past quarters.

Other areas of Kors' operations were mixed. Wholesale revenue climbed 2.5%, benefiting in part from good business performance and in part from favorable foreign-exchange movements. Licensing revenue fell by about 2%.

Geographically, Kors continued to get its best performance from overseas. The core Americas segment saw revenue climb just 1%. Europe managed a more impressive 9% gain, half of which came from strength in the euro, and revenue from Asia jumped at a 30% clip compared to the year-ago quarter.

CEO John Idol explained why the company is so confident right now. "This is a transformative time for Michael Kors Holdings Limited," Idol said, "as we established our global fashion luxury group with the recently completed acquisition of Jimmy Choo." The CEO believes that the move not only fleshes out Kors' current platform but also puts it in position to consider future acquisitions.

Can Kors move forward?

Kors pointed to milestones in its efforts to implement its Runway 2020 strategic plan. The company boosted new fall offerings by 40% while boosting brand engagement and improving customer experience. The naming of Chinese actress Yang Mi as the company's first brand ambassador could position Kors even more prominently within the key China market, and improved social media metrics point to a new buzz for the retailer that will be important in its long-term turnaround efforts.

In addition, Kors boosted its guidance. For the full fiscal year, the company now expects $4.59 billion in revenue, up $315 million from its previous projections. About $215 million to $225 million of that boost will come from the Jimmy Choo acquisition, but the rest represents solid organic growth that points to the brand's resurgence. Guidance for earnings of $3.85 to $3.95 per share represents a $0.23 jump on the bottom line, even though it includes dilution from the acquisition of roughly $0.08 per share. Fiscal third-quarter revenue projections of $1.355 billion to $1.385 billion also compare favorably to investor expectations, although quarterly earnings of $1.22 to $1.27 per share would be a bit less than hoped.

Shareholders responded favorably to the report, and the stock climbed 10% when it opened for trading on Wall Street following the announcement. After having had to deal with such a difficult period, Michael Kors now seems to have regained its momentum, and bullish investors hope that the holiday season will go as well as the luxury retailer believes it will.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of Michael Kors Holdings. The Motley Fool has a disclosure policy.