Michael Kors (CPRI -0.56%) just released third-quarter results for fiscal 2014 that blew past analyst expectations, which sent its shares much higher. This has been one of the best growth stocks in the market since the company went public in December 2011, and it has proven time and time again that it is a force to be reckoned with. Let's take a look at the results for Michael Kors and decide if now is the time to pick up a new position or add to an existing one, or if we should wait for the stock price to come down a bit.

Source: Michael Kors.

"Affordable luxury" at its finest
Michael Kors is home to one of the most fashionable lines of women's and men's apparel and accessories. The most consumer attention has been placed on its watches and handbags, but it has been gaining ground in clothing, footwear, sunglasses, and other categories as well. There are not many fashion-house brands that cater to the tastes of both women and men, but Michael Kors has apparently found the recipe for success.

The results

Michael Kors' third-quarter report was released on Tuesday before the market opened, and it exceeded analyst expectations on both the top and bottom lines. Here's an overview of the results:

Earnings per share $1.11 $0.86
Revenue $1.01 billion $859.94 million

Earnings per share increased 73.4% and revenue increased 59% year over year, driven by incredible comparable-store sales growth of 27.8%. This was the 31st consecutive quarter of comparable-store sales growth for Michael Kors and it does not appear that this streak will end anytime soon. Gross profit increased 61.6% to $619.5 million as the company's gross margin expanded 100 basis points to 61.2%, proving that the "promotional" holiday retail environment was no match for this brand. Check out the breakdown of sales growth by region:

RegionQ3 2014Q3 2013Growth
North America $862.62 million $573.12 million 50.5%
Europe $140.29 million $57.6 million 143.6%
All other regions $9.32 million $6.06 million 53.8%

There are now 533 Michael Kors stores worldwide, compared to just 368 at the conclusion of the third quarter last year. The company believes its store count could easily push toward 700 over the next few years, and it appears to be right on track. This expansion will keep revenue on the rise and allow Michael Kors to reach as many luxury markets as possible.

Overall, this earnings report blew past expectations and left analysts and investors in awe. This is the first time Michael Kors has exceeded $1 billion in revenue and there is no doubt in my mind that this will be the first of many quarters to reach this number. These results caused the stock to spike more than 15% in pre-market trading, and I believe they can support a sustained rally even higher.

Updated outlook 
In the report, Michael Kors also updated its guidance for the fourth quarter. The company expects earnings per share to be in the range of $0.63 to $0.65 on revenue of $790 million to $800 million; it also projects comparable-store sales to grow 15% to 20%. These numbers would result in earnings per share increasing 26% to 30% and revenue rising 32.3% to 34% year over year. After what we just saw in the third quarter, I am fully confident that Michael Kors will meet or exceed these expectations.

Kors > Coach
As Michael Kors has showed immense growth over the last few years, Coach (TPR -1.92%) has struggled mightily. These struggles can be seen in its earnings reports, like the most recent one released on Jan. 22. Coach's results missed expectations on both the top and bottom lines:

Metric Reported Expected
Earnings per share $1.06 $1.11
Revenue $1.42 billion $1.48 billion

Coach's earnings per share decreased 13.8% and revenue fell 5.3% year over year as a result of weaker-than-expected sales in handbags and accessories and slower customer traffic in its stores. Gross profit declined 9.4% to $982.7 million as the gross margin plummeted 300 basis points to 69.2%. This was a horrible quarter all around for Coach, which caused the stock to decline more than 6% in the next day's trading, and it has continued much lower. I think Michael Kors has caused Coach's problems in the retail market, because its products are much more desired. Coach needs to make some major moves to get back in the game, but until then, I believe its stock is untouchable.

The Foolish bottom line 
Michael Kors is the new titan of the luxury goods market and it has proven once again that analysts cannot keep up. It has exceeded every set of expectations since it went public more than two years ago, and its sales have just topped $1 billion for the first time. The stock is soaring on the news of the earnings, so investors should wait for weakness before initiating a new position. Do not wait too long, though, as this company and stock seem destined for much greater things.