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:TPR), 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.
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.
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.
Andrew Sebastian has the following options: long August 2014 $105 calls on Michael Kors Holdings. The Motley Fool recommends Coach, Facebook, Google (C shares), Michael Kors Holdings, and Twitter. The Motley Fool owns shares of Coach, Facebook, Google (C shares), and Michael Kors Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.