Michael Kors 2Q sales fall in key European market

Shares of Michael Kors Holdings Ltd. plunged Wednesday after the luxury retailer reported a drop in European sales that weighed down revenue.

The stock fell $6.45, or 11.2 percent, to $51 in premarket trading. The weak European sales and disappointing revenue occurred while the company and its peers try to overhaul operations as shoppers shift purchases online, often getting the same luxury goods at lower prices.

Michael Kors closed some locations earlier this year. It is also still focusing on marketing the Jimmy Choo brand, which it bought last year and the Versace brand that it is set to purchase for more than $2 billion.

The London-based company's profit fell 32 percent to $137.6 million, or 91 cents per share. But adjusted profit of $1.27 per share still topped Wall Street expectations by 18 cents per share.

Revenue rose 9.3 percent to $1.25 billion in the period, but that figure fell just shy of $1.26 billion expected by analysts.

The company reported revenue growth in the Americas region and Asia, but both retail and wholesale revenue in Europe fell.

For the current quarter ending in January, Michael Kors Holdings said it expects revenue in the range of $1.46 billion. Analysts surveyed by Zacks had expected revenue of $1.47 billion.

The company expects full-year earnings in the range of $4.95 to $5.05 per share, up a nickel from its prior estimated range, with revenue expected to be $5.13 billion.

Michael Kors Holdings shares have dropped roughly 9 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 3 percent. The stock has climbed 5 percent in the last 12 months.

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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on KORS at https://www.zacks.com/ap/KORS