Michael Kors comparable sales fall more than expected

Markets Reuters

(Copyright Reuters 2017)

Apparel and accessories maker Michael Kors Holdings Ltd reported a bigger-than-expected drop in quarterly comparable sales, citing disappointing sales in North America and Europe.

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The company also warned that weakness in these regions would continue through spring due to lower traffic in shopping malls, currency fluctuation, uncertainty surrounding political changes in European countries and as it cuts back on promotions in North America.

North America and Europe together account for most of Michael Kors' total sales.

Shares of the company, which also forecast fourth-quarter revenue and profit below the average analysts' estimate, were down 7.7 percent at $38.10 in premarket trading on Tuesday.

Comparable sales fell 6.9 percent in the third quarter ended Dec. 31. Analysts had expected a 4.9 percent decline, according to research firm Consensus Metrix.

Net income attributable to the company fell to $271.3 million, or $1.64 per share, from $294.6 million, or $1.59 per share, a year earlier.

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Total revenue fell 3.2 percent to $1.35 billion.

Analysts on average had expected earnings of $1.63 per share on revenue of $1.36 billion, according to Thomson Reuters I/B/E/S.

The company forecast current-quarter revenue of $1.04 billion-$1.06 billion, missing estimates of $1.11 billion.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)