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Michael Kors’ Q1 revenue dips 3.6% to $952.4m

RBR Staff Writer Published 09 August 2017

Michael Kors has reported a decrease of 3.6% in its net revenue to $952.4m in the first quarter of fiscal 2018 ended 1 July 2017, compared to $987.9m for the same period last year.

The luxury fashion retailer’s gross profit declined by 2.8% to $574.7m in Q1, compared to $591.3m in the year-ago period.

Michael Kors saw its retail net sales grow by 10.1%, reaching $619.9m which it says was primarily driven by the opening of 67 new stores since the end of Q1 2017 in addition with the impact of the Greater China license acquisition.

The luxury retailer’s wholesale net sales came down to $303.6m, marking a decrease of 23.0% compared to the reported $394.4m in Q1 2017 which ended on 2 July 2016.

On the other hand, its licensing revenue dropped to $28.9m, which is 5.6% lesser than the $30.6m earned in Q1 2017. 

Asia was the most profitable segment for Michael Kors in Q1 2018 as its revenue in the continent surged 60.2% to $117.1m. In the Americas, the total revenue dropped 8.2% to $634.1m while in Europe, it came down 10.2% to $201.2m in Q1 2018.

Michael Kors says that by the end of the first quarter of fiscal 2018, its operated store count was 838, compared to 771 retail stores it operated in the same quarter in the previous fiscal year. It said that with licensed locations included, overall there are 979 Michael Kors stores across the world by the end of Q1 2018.

Michael Kors chairman and CEO John D. Idol said: “Our first quarter performance exceeded our expectations, driven largely by better than anticipated retail comparable sales results in both North America and Europe.

“We are encouraged by our first quarter performance, although we continue to believe that fiscal 2018 will be a transition year for our company, as we focus on laying the foundation for the future by executing on our strategic plan, Runway 2020.

“While it is still early in the process, we are making meaningful progress enhancing our assortments, deepening our connection with consumers, and elevating our jet set luxury experience in our stores and digital flagships."

Recently, Michael Kors had agreed to acquire British luxury shoe and bag retailer Jimmy Choo for $1.2bn.

Image: Window of a Michael Kors purse shop. Photo: courtesy of See-ming Lee/Commons.wikimedia.org.