Michael Kors Slumps 6% After Credit Suisse Downgrade

Michael Kors Holdings Ltd. shares dropped 6% in early trading on Tuesday after Credit Suisse cut the fashion label's stock rating to neutral from outperform. Analyst Christian Buss said he's increasingly concerned about the level of promotions seen in the upscale department store space, adding the percentage of Kors units on sale in that channel spiked to 31% in December from 5% in October. He said Kors put 18% of its handbag units on sale between October and December, the highest level compared to other top brands' average of 12%. He said Kors also discounted 65% of handbags on the company-owned website in December, making it the most promotional website among six brands Buss studied. While the company has kept a consistent level of discounting at mid-tier department stores, the analyst said he's concerned that discounting may spill into the mid-priced space in the new year.