If you follow the stock market, chances are you heard about the blowout quarter Michael Kors (CPRI -0.11%) reported on Feb. 4. Shares skyrocketed over 17.25% on the day of the release and the run higher has continued. However, as many investors focused directly on the results while comparing them to the year before, I was very impressed with an update that many others overlooked.

Affordable luxury at its finest
Michael Kors is a high-growth luxury goods company, with an expanding presence worldwide. Its products include women's and men's apparel and accessories, with the most popular of these beings handbags and watches. These products are available through Michael Kors' company-owned retail stores as well as licensed stores and select department stores such as Macy's. 

A glance at the earnings
The third-quarter report was released on Feb. 4 and it soared past analysts expectations.. Here's a breakdown of the report:

Metric Reported Expected
Earnings per share $1.11 $0.86
Revenue $1.01 billion $859.94 million
  • Earnings per share increased 73.4%
  • Revenue rose 59%
  • Global comparable-store sales grew 27.8%
  • North American comparable-store sales rose 24%
  • Gross profit increased 61.6% to $619.5 million
  • Gross margin expanded 100 basis points to 61.2%

What you may have missed
In its report, Michael Kors gave updated guidance for the fourth quarter, but what many may have missed is that the company also updated its guidance for fiscal 2014; this update factored in the results from the first three quarters, which made for an outstanding new set of estimates. The update was missed by many because it just consisted of four sentences in the release, but it is something that investors must see. Here are both sets of updated guidance:

Fourth quarter:

Metric 4Q '14 Guidance 4Q '13 Growth
EPS $0.63-$0.65  $0.50 26%-30%
Revenue $790 million-$800 million $597.2 million  32.3%-34%

Fiscal 2014:

Metric Fiscal 2014 Guidance Fiscal 2013 Growth
EPS $3.07-$3.09 $1.97 55.8%-56.9%
Revenue $3.18 billion-$3.19 billion $2.2 billion 44.6%-45%

The company's previous full-year earnings outlook called for $2.77-$2.81 per share on revenue of $2.9 billion, so this increase was quite substantial. In addition, Michael Kors noted that it expects comparable-store sales to increase 15%-20% in the fourth quarter and 25% overall for the fiscal year. This would be an incredible accomplishment to add on top of an already very impressive year. After what we just saw in the third quarter, I am fully confident that Michael Kors will meet or exceed these expectations, which will allow its shares to continue rallying higher.

Not everyone sees green
As Michael Kors sees nothing but growth and success in its future, Coach (TPR 0.03%), its largest competitor, seems destined for the opposite performance. Coach's last earnings report came on Jan. 22 with earnings per share declining 13.8% and revenue falling 5.3%. It is not expected to get any better the next time out for Coach either, as analysts expect the following in the third quarter:

Metric Expected % Change
Earnings Per Share $0.62 (26.2%)
Revenue $1.1 billion (8.3%)

As you can see, Coach's third quarter is expected to contain even sharper year-over-year declines than the second quarter did. Another negative quarter will not help Coach's stock, which has already fallen more than 14.5% year-to-date and underperformed the overall market. In my opinion, Coach's stock should not be touched, regardless of how "inexpensive" it becomes. Instead, investors should go with the new king of the luxury-goods space, Michael Kors.

The Foolish bottom line
Michael Kors has continued to astonish investors with each earnings release since it went public in December of 2011. Its third-quarter report was one for the record books and its guidance going forward is icing on the cake. I believe Michael Kors should be a part of every investor's portfolio, so keep a close eye on the company and consider buying shares right now or on any weakness the market provides.