Michael Kors Q2 revenue up 74 percent

Michael Kors Holdings Limited, total revenue increased

by 74 percent to 532.9 million dollars (Rs 2,928 crores) from 305.5 million dollars (Rs 1,678 crores) in its financial results for the second quarter ended September 29, 2012. Gross profit increased by 80 percent to 315.9 million dollars (Rs 1,735 crores), and as a percentage of total revenue increased to 59.3 percent compared to 57.3 percent in the second quarter.

Retail net sales increased by 82 percent to 242.3 million dollars (Rs 1,331 crores) driven by a 45.1percent increase in comparable store sales and 66 new store openings since the end of the second quarter last year. Wholesale net sales increased by 75 percent to 270.8 million dollars (Rs 1,487 crores) and licensing revenue increased 13 percent to 19.9 million dollars (Rs 109 crores).

Income from operations was 157.9 million dollars (Rs 8,675 crores) and as a percentage of total revenue was 29.6 percent. For the second quarter of fiscal 2012, income from operations was 59.3 million dollars (Rs 325 crores) and included a 10.7 million dollars (Rs 58 crores) charge related to the employee share option redemption associated with our private placement. Excluding this amount, income from operations was 70.0 million dollars (Rs 384 crores), or 22.9 percent as a percentage of total revenue.

Net income was 97.8 million dollars (Rs 537 crores), or 0.49 dollars (Rs 26.9) per diluted share, based on 200.2 million weighted average diluted shares outstanding. Net income for the second quarter of fiscal 2012 was 40.6 million dollars (Rs 223 crores), or 0.22 dollars (Rs 12) per diluted share, based on 187.6 million weighted average diluted shares outstanding. Excluding the aforementioned charge, net income for the second quarter of fiscal 2012 was 47.5 million dollars (Rs 260 crores), or 0.25 dollars (Rs 13.7) per diluted share.

John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “Michael Kors delivered another outstanding quarter with exceptional sales growth across our business segments and geographies. Our North America comparable store sales growth of 45.1 percent demonstrates the strong demand for Michael Kors products as we continue to offer a compelling assortment of luxury merchandise and exceptional service in a jet set store environment. The net sales growth of 76 percent in our North America wholesale segment reflects the continued successful conversion to shop-in-shops in department stores as well as exceptional comparable store sales. We continue to gain brand acceptance in Europe as evident by the 97 percent sales growth we achieved in this region. Finally, in our licensing segment, we achieved 13 percent growth, which was driven primarily by ongoing strength in watches. We remain very excited about the long term growth prospects for our company as a global luxury lifestyle brand.”

The Hong Kong based company’s total revenue for the first six months of 2012 increased by 73 percent to 947.8 million dollars (Rs 5,207 crores) from 548.7 million dollars (Rs 3,014 crores) in the same period of fiscal 2012. Retail net sales increased by 79 percent to 457.3 million dollars (Rs 2,512 crores). Wholesale net sales increased by 71 percent to 453.2 million dollars (Rs 2,490 crores) and licensing revenue increased by 31 percent to 37.4 million dollars (Rs 205 crores). Gross profit for the first six months increased 82 percent to 566.9 million dollars (Rs 3,114 crores), and as a percentage of total revenue increased to 59.8 percent as compared to 56.9 percent in the same period of fiscal 2012. Net income for the first six months was 166.5 million dollars (Rs 914 crores), or 0.83 dollars (Rs 45.6) per diluted share. Net income was 64.7 million dollars (Rs 355 crores), or 0.35 dollars (Rs 19.2) per diluted share.

Michael Kors stores are operated, either directly or through licensing partners, in some of the most prestigious cities in the world, including New York, Beverly Hills, Chicago, London, Milan, Paris, Munich, Istanbul, Dubai, Seoul, Tokyo and Hong Kong. By the end of the second quarter 2012, company operated 269 retail stores, including concessions, compared to 203 retail stores, including concessions, at the end of the same prior-year period. The company had 80 additional retail stores, including concessions, operated through licensing partners, including licensed locations, there were 349 Michael Kors stores worldwide.