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News Breaks
August 4, 2014
13:25 EDTRL, KORS, KATE, COHMichael Kors retreats after reporting margin decline
Shares of luxury accessories maker Michael Kors (KORS) are falling after the company reported stronger than expected results for the first quarter of its fiscal 2015, but said that its gross margins had dropped during the quarter. The company also estimated that its gross margin would drop in fiscal 2015. Analysts were divided on the company's outlook following the results. WHAT'S NEW: Michael Kors reported first quarter earnings per share of 91c, compared with analysts' consensus estimate of 81c. The company's revenue came in nearly $70M above expectations at $919.2M. However, Michael Kors' retail operating margin fell to 29.7% last quarter from 31.7% during the same period a year earlier, partially due to increased discounts. The company warned that its retail gross margin would likely decline about half a percentage point this year. On a positive note, the accessories designer provided fiscal 2015 EPS guidance of $4.00-$4.05, versus analysts' consensus estimate of $3.96. ANALYST REACTION: In a note to investors earlier today, Sterne Agee analyst Ike Boruchow wrote that "red flags abound" for the company. Specifically, Michael Kors' gross margins look poised to come under pressure as its spending is accelerating, the analyst warned. Meanwhile, the company's inventories were "heavy," and its first Fall products were not well-received by customers, the analyst stated. Although it remains to be seen if the red flags will become a "tipping point" for Michael Kors' profitability, investors should stay on the sidelines on the name until the outcome becomes more certain, advised Boruchow, who lowered his price target on the shares to $85 from $92 and kept a Neutral rating on the stock. Conversely, Bank of America Merrill Lynch analyst Robert Ohmes wrote that the "impressive momentum" of Michael Kors should continue, partly due to its expected launch of new products for men this fall, its "impressive" growth in Europe, its launch of 100 new footwear shops, and strong licensing revenue. He expects the company's results to continue beating expectations and said that today's pullback in the stock has created a buying opportunity. OTHERS TO WATCH: Michael Kors' competitors include Coach (COH), Kate Spade (KATE) and Ralph Lauren (RL). PRICE ACTION: In mid-afternoon trading, Michael Kors slumped 6.6% to $76.42.
News For KORS;COH;KATE;RL From The Last 14 Days
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August 3, 2015
09:08 EDTKATEKate Spade could see relief rally on in-line results, says Stephens
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07:53 EDTKORSCanaccord remains cautious on Michael Kors heading into earnings
Canaccord said it remains cautious on Michael Kors heading into the company's earnings report on Thursday. The firm believes the sluggishly negative retail traffic trends from last quarter persisted into Q1, leading to a supply/demand imbalance. Canaccord lowered its estimates and price target to $45 from $48 and maintained its Hold rating on Michael Kors shares.
07:21 EDTCOH, KORSCoach downgraded to Neutral from Overweight at JPMorgan
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06:42 EDTKORSMichael Kors inventory building at retailers, says Piper Jaffray
Piper Jaffray analyst Erinn Murphy lowered her estimates for Michael Kors (KORS) after channel checks indicated the company's inventory is building at retailers like Macy's (M) and Dillard's (DDS). Further, sales of watches remain under pressure in the U.S. and are starting to slow in Europe, Murphy tells investors in a research note. She believes Kors's negative comps will continue beyond this year as its fundamentals continue to deteriorate. Murphy cut her price target for shares to $38 from $44 and keeps a Neutral rating on the name. The handbag maker closed Friday down 13c to $41.99.
06:03 EDTKORSMichael Kors implied volatility of 57 at upper end of index
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July 31, 2015
15:11 EDTKATEKate Spade volatility elevated into Q2 and outlook
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14:47 EDTRLRalph Lauren volatility elevated into Q1 and outlook
Ralph Lauren August call option implied volatility is at 34, September is at 29; compared to its 52-week range of 14 to 37, suggesting large near term price movement into the expected release of Q1 results on August 5.
13:03 EDTCOHCoach volatility elevated into Q4 and outlook
Coach August weekly call option implied volatility is at 74, August is at 49, September is at 40; compared to its 52-week range of 21 to 44, suggesting large near term price movement into the expected release of Q4 results on August 4.
05:47 EDTKORSStocks with implied volatility movement; KORS VALE
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July 30, 2015
10:18 EDTKORSMichael Kors call activity attributed to takeover speculation
Michael Kors July 40 and 40.5 calls are active on total call volume of 2500 contracts (300 puts) amid speculation private equity is interested in the company. July weekly call option implied volatility is at 40, August is at 52, September is at 42; compared to its 52-week range of 23 to 54. Active call volume suggests traders taking positions for large price movement,
10:13 EDTKORSRumor: Michael Kors strength attributed to takeover speculation
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July 29, 2015
10:00 EDTKORSOn The Fly: Analyst Initiation Summary
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09:14 EDTKORSMichael Kors initiated with a Hold at BB&T
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July 28, 2015
10:23 EDTCOH, KATE, KORSBMO Capital says high-end handbag makers to stay weak
High end handbag makers Coach (COH), Kate Spade (KATE) and Michael Kors (KORS) are continuing to struggle and their share prices are likely to remain weak, research firm BMO Capital wrote in a note to investors today. The firm significantly cut its price targets on all three names. WHAT'S NEW: Consumers are spending less on high-end handbags as they increase the amount they allocate to other areas, including travel, leisure and apparel, BMO Capital analyst John Morris stated. Consequently, the North American handbag market was expanding at a 5% rate at the end of June, down from a high single digit rate earlier this year, according to Morris. Meanwhile, competition within the space is mounting and handbag price wars are continuing, the analyst stated. Although handbag stocks have dropped significantly and their valuations appear attractive, they are "falling knives," the analyst warned. Assessing the status of specific companies, Morris says that Kate Spade has avoided implementing major price cuts on its products, though its comparative sales and "mind share" have suffered as a result of that decision and stores are displaying its products less prominently. Coach's stock suggests that investors expect the company's fundamentals to rebound, but Morris thinks that their optimism may be premature. The pace of the company's improvement "remains challenging," and it is likely to be hurt by a decline of U.S. tourism, he believes. Also likely to be hurt by declines in tourism is Michael Kors, the analyst stated. The prices of Michael Kors' products are being reduced by retailers, its gross margins are sinking and its watch business is weak, Morris warned. He reduced his price target on Kate Spade to $19 from $30, on Coach to $28 from $37 and on Michael Kors to $40 from $51. The analyst kept Market Perform ratings on all three stocks. PRICE ACTION: In early trading, Kate Spade was little changed at $18.75, Coach fell 0.5% to $30.60 and Michael Kors was fractionally higher at $39.17.
09:04 EDTKORS, KATE, COHHandbag makers estimates, price targets lowered at BMO Capital
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July 23, 2015
10:00 EDTKORSOn The Fly: Analyst Downgrade Summary
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10:00 EDTCOHOn The Fly: Analyst Upgrade Summary
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08:48 EDTCOHCoach upgraded to Neutral from Underperform at Buckingham
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08:48 EDTKORSMichael Kors downgraded to Neutral from Buy at Buckingham
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July 22, 2015
07:25 EDTCOHCoach price target lowered to $40 from $47 at Stifel
Stifel cut its price target on Coach as the firm believes that competition in the accessories category is increasing, causing a deceleration in the segment. However, the firm keeps a Buy rating on the stock.
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