Michael Kors Holdings Limited (NYSE:KORS) Q3 2015 Earnings Conference Call - Final Transcript

Feb 05, 2015 • 08:00 am ET


Michael Kors Holdings Limited (NYSE:KORS) Q3 2015 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Michael Kors Holdings Limited Third Quarter 2015 Conference Call. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. As a reminder, today's conference is being recorded.

And now, I would like to turn the conference over to Krystyna Lack, Vice President and Treasurer. You may begin.

Krystyna Lack

Thank you, good morning. And thank you for joining us for our third quarter earnings call. Presenting on today's call are John Idol, Chairman and Chief Executive Officer, who is calling in from London and Joe Parsons, Chief Financial and Chief Operating Officer.

(Forward-looking cautionary statements)

I will now turn the call over to Michael Kors' Chairman and Chief Executive Officer, Mr. John Idol.

John Idol

Thank you, Krystyna. Good morning, and welcome to Michael Kors third quarter fiscal 2015 earnings call. On this call today is Joe Parsons, our Chief Financial and Chief Operating Officer. I will begin with an overview of our third quarter performance and provide an update on our long-term growth strategies. Then I will turn it over to Joe for a discussion of our financial results and our outlook for the fourth quarter and full year. Our solid financial results in the third quarter speak to the strength of the Michael Kors brand.

We delivered our 35th consecutive quarter of positive comparable store sales growth and drove approximately 30% growth in both retail -- both revenue and net income with a strong holiday season.During the quarter, we continued to see strong momentum across our operating segments and geographies led by a double-digit comps sales increase in our accessories category in both retail and wholesale. In North America, sales increased more than 20%, and we delivered solid comp gains on top of significant increases last year.

Notably, we saw exceptional performance from our U.S. e-commerce site, which generated a sales increase of 73%, as compared to the sales of the previous outsourced

John Idol

exceeding our expectations. In addition, sales in both Europe and Japan increased 72% for the quarter. We are also pleased to report that we repurchased approximately 5 million shares during the quarter, reflecting the confidence we have in our future growth potential and our commitment to enhancing shareholder value.

Importantly, we continue to execute on our long-term strategies during the quarter which are focused on first, growing our retail presence through our new store openings and store expansions in key locations throughout the world.

Second, developing a global best-in-class e-commerce strategy with omni-channel capabilities beginning with the launch of our enhanced company-owned U.S. e-commerce Web site in September 2014, followed by the upcoming launch in Canada this year, and Europe and Japan in 2016. Third, driving increased comparable store sales in our retail locations and our wholesale shop-in-shops by great fashion products and a unique in-store experience that embodies the Michael Kors luxury brand.