Fueled by a 70% surge in sales, Michael Kors (KORS) revealed soaring fiscal third-quarter earnings on Tuesday that blew away Wall Street’s expectations, and the company predicted the bullish trend will continue this quarter.
Shares of the fashion company soared about 11% ahead of the opening bell on the upbeat results and outlook.
Michael Kors said it earned $130.0 million, or 64 cents a share, last quarter, compared with a profit of $32 million, or 20 cents a share, a year earlier. Analysts had been calling for EPS of just 41 cents.
Revenue jumped 70% to $636.8 million, easily besting the Street’s view of $540.3 million. Gross margins rose to 60.2% from 59.4%.
Same-store sales soared 41% in North America amid strong demand for luxury products, while same-store sales were up in slow-growing Europe by an impressive 58%. Licensing revenue increased 52% year-over-year due to strength for the company’s watches.
The result reflect “sustained brand momentum as the global recognition and appeal for the Michael Kors luxury brand continued to expand,” CEO John Idol said in a statement. “We were extremely pleased with the holiday season as Michael Kors’ brand strength, innovative fashion design and jet-set in-store experience drove strong sales and earnings.”
Michael Kors also unveiled a rosy guidance, projecting fiscal 2013 EPS of $1.80 to $1.82, which would be well above current estimates for EPS of $1.57. The company sees full-year sales of about $2.1 billion, compared with the Street’s view of $2.01 billion.
For the current quarter, Michael Kors forecast EPS of 32 cents to 34 cents on sales of about $515 million to $525 million. By comparison, analysts had been calling for EPS of 33 cents on revenue of $513.3 million.
“We believe that the Michael Kors brand is ideally positioned within the global luxury lifestyle market and we look forward to delivering on our long-term objectives,” Idol said.
Inspired by the bullish developments, Michael Kors shares rallied 11.65% to $63.64 in premarket trading, putting them on pace to tack onto their 2013 gain of 11.7%. Even before Tuesday’s jump, the stock had surged 70% over the past 12 months.