Source: Michael Kors.

The retail world is full of companies that were once at the pinnacle of their industry but then went out of style. Recently, luxury retailer Michael Kors Holdings (NYSE:CPRI) has shareholders worried it will be the next casualty of the fickle fashion industry, as revenue growth has decelerated far more quickly than most anticipated. Coming into its fiscal third-quarter financial report Thursday morning, Michael Kors looked to deliver solid holiday-season results. But as we've seen in recent quarters, investors instead focused on troubling forward-looking trends, and the stock plunged immediately after the results were released. Let's look at why Michael Kors inspired such fear with its latest results.

What Michael Kors told us this morning
Michael Kors followed the same pattern seen in past quarters, topping consensus estimates. Total sales jumped nearly 30% to $1.31 billion, and net income of $303.7 million produced earnings per share of $1.48, far ahead of the $1.33 per share most investors had anticipated.

Looking more closely at the results, Kors realized the biggest gains in its retail segment, with sales growing 37% from the year-ago quarter. But the wholesale business also did reasonably well, as a revenue gain of 24% bolstered Kors' overall results. Kors also continued seeing better results from its international exposure, with revenue in both Europe and Japan climbing 72% even after factoring in extremely adverse currency impacts. Comparable-store sales trends abroad were equally impressive, with comps rising nearly 30% in Europe on a constant-currency basis and a 54% gain in Japan.

Source: Michael Kors.

Yet the sore spot remains how much of the company's growth has come from aggressive expansion. Overall comparable-store sales growth dropped all the way to 8.6%, and even adjusting for the negative currency impacts that Kors has suffered, comps growth of 10.9% on a constant-currency basis plunged far below where shareholders are comfortable from the high-growth retailer. North American growth looked especially sluggish, with an overall revenue gain of 23% and just a 6% rise in comps.

CEO John Idol emphasized the positives of the holiday quarter, noting strength in sales of accessories and success in Kors' e-commerce sales, which rose by 73% during the quarter. Yet despite Idol's assertion that "Michael Kors remains a leader within the global fashion luxury market," investors weren't convinced the company is in position to keep growing fast enough to suit them.

What's behind the big drop for Michael Kors?
As we saw last quarter, future guidance has investors worried about what's next for Michael Kors. Kors projected the fiscal fourth quarter will show revenue of between $1.05 billion and $1.08 billion, well below the $1.10 billion that investors expect. Earnings of $0.89 to $0.92 per share would also be a letdown compared to the $0.94 consensus. Investors, though, seem to have forgotten Kors provided similarly dour guidance for the just-reported quarter, and its revenue and earnings topped those lowered expectations easily. Moreover, Kors actually boosted its guidance for the full 2015 fiscal year, with earnings per share in a range between $4.27 and $4.30 and revenue at the top end of its previous range near $4.4 billion.

Source: Michael Kors.

Still, the bigger concern has to be with fiscal 2016. Already, investors have priced in substantial deceleration in earnings and revenue growth, with top-line gains of 20% and EPS growth of just over 15%. As quarterly comps fall into the high single-digit percentage range even on a currency-neutral basis, the fear is Kors will see further fading of the competitive advantage that brought it so much success.

Traders in Michael Kors have clearly lost confidence in the retailer, with the stock plunging 11% in the first 30 minutes of pre-market trading after the announcement. For long-term investors, meanwhile, the realization that Kors' best growth years might be behind it has been hard to swallow. Even with shares at increasingly attractive valuations, Kors will have to give investors at least some sign of a turnaround if it wants to keep them interested in the company for the long haul.