Shares of Michael Kors Holdings Ltd. fell 13.9 percent in early morning trading after the company missed Wall Street’s revenue estimates and lowered guidance for fiscal year 2017.
While third-quarter profits slipped, they still topped expectations. But the results in general reflected lagging consumer sales that hurt many brands and retailers over the holiday season.
For the three months ended Dec. 31, net income was down 7.9 percent to $271.3 million, or $1.64 a diluted share, from $294.6 million, or $1.59, a year ago. Net revenues fell 3.2 percent to $1.35 billion from $1.4 billion, which included a net sales decrease of 2.4 percent to $1.31 billion from $1.34 billion. The company said that comparable-store sales declined 6.9 percent.
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The company beat Wall Street’s consensus EPS estimate of $1.63, but missed revenue estimates of $1.36 billion.
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John D. Idol, chairman and chief executive officer, said earnings per share were in line with company expectations and that the firm “continued to focus on our growth pillars, which are centered on consistently delivering innovative fashion products for our customers and enhancing consumer engagement with the Michael Kors brand worldwide.”
The company said it expects total revenue for the fourth quarter to be between $1.04 billion and $1.06 billion, with a comps decrease in the low-teens range. Diluted EPS was guided to 68 cents to 72 cents.
For fiscal year 2017, the company said total revenues is expected at $4.48 billion and comps to decline in the high-single digit range. Diluted EPS is forecasted in the range of $4.09 to $4.13 on a GAAP basis, which includes one-time charges. That compares with guidance of $4.32 to $4.38, on revenue expectations of $4.55 billion, when the company posted second quarter results in November.
Shares of Kors were trading at $35.53 at 9:37 a.m.