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For 3Q18, $KORS expects total revenue to be between $1.355Bil and $1.385Bil, including $105-110MM of incremental Jimmy Choo revenue. Comparable sales for the Michael Kors brand are expected to decline in the high-single digits. Diluted EPS is expected to be $1.22-1.27.
$KORS announced that Michael Kors (USA), Inc., its subsidiary, will commence an offering of senior notes. The notes will be issued to finance, in part, the company’s pending acquisition of Jimmy Choo PLC and its subsidiaries. The proceeds of the notes will be held in escrow until immediately prior to the consummation of the acquisition.
$KORS lifted its outlook for FY18, the year which MKHL believes to be a transition year for the company. Revenue upped to approx $4.275Bil from the prior estimate of $4.25Bil and EPS also lifted to $3.62-3.72 from the previous expectation of $3.57-3.67. For 2Q18, the accessories maker expects revenue to be $1.035-1.055Bil and EPS to be $0.80-0.84.
Handbag maker $KORS said that its profit in 1Q18 was above the company's expectations. However, net income attributable to MKHL dropped 15% to $125.5MM, while on a per share basis, it decreased 4% to $0.80. Revenue fell 3.6% to $952.4MM due to lower sales in Americas and Europe regions. Comp store sales dropped 5.9% in the recently ended quarter.
$KORS agreed to buy Jimmy Choo Plc, a global luxury footwear and accessories brand. Jimmy Choo's shareholders will receive 230 pence per share, with an enterprise value of about $1.35Bil. The transaction is expected to close in calendar 4Q17. The acquisition is expected to be accretive on a GAAP basis in FY20.
In the Wholesale segment, $KORS' net sales declined 22.8% in 4Q17, with Americas declining 22.1%, driven mainly by reduced selling into the department store channel and the decision to reduce the authorized promotional periods to four times per year. In the License segment, revenue declined 6.2%, while Eyewear saw strong results in the quarter.
$KORS said it is planning to close between 100-125 lifestyle stores globally over the next two years. The company added that it will continue to selectively open new stores in key cities, with a primary focus on expanding its presence in Asia.
$KORS' Asia retail net sales rose more than 200% in 4Q17, driven by the shift in China sales to the company owned retail segment. However, Asia comparable sales, including Japan and Korea, grew in the low single digits on a reported basis and were flat on a constant currency basis.