Upcoming AWS Coverage on Hanesbrands Post-Earnings Results

LONDON, UK / ACCESSWIRE / June 2, 2017 / Active Wall St. blog coverage looks at the headline from high-end fashion retailer Michael Kors Holdings Ltd (NYSE: KORS) ("MKHL") as the Company announced on May 31, 2017, its financial results for Q4 FY17 and the fiscal year ending on April 01, 2017. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Michael Kors Holdings' competitors within the Textile - Apparel Clothing space, Hanesbrands Inc. (NYSE: HBI), announced on May 02, 2017, its financial results for Q1 2017 and also launched a multiyear initiative to increase investment for growth, reduce costs, and drive cash flow. AWS will be initiating a research report on Hanesbrands in the coming days.

Today, AWS is promoting its blog coverage on KORS; touching on HBI. Get all of our free blog coverage and more by clicking on the link below: http://www.activewallst.com/register/.

Commenting on MKHL's financial performance, John D. Idol, Chairman and CEO of MKHL said:

"Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels. We acknowledge that we need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products. Looking ahead, as we expand the fashion innovation in our accessories assortments, right-size our store fleet and elevate our store experience, fiscal 2018 will be a transition year in which we establish a new baseline before returning to long-term growth."

The Q4 fiscal 2017 results

The global luxury fashion brand Company's total revenues for the fourth quarter of fiscal 2017 was $1.06 billion, which was 11.2% lower than the $1.20 billion total revenues reported in the fourth quarter of fiscal 2016.

The retail net sales for Q4 FY17 were $575.3 million which saw a marginal increase of 0.5% compared to the same period in FY16. The increase in sales was attributed to the opening of 159 new stores, including 111 stores acquired from its previously licensed operator in Greater China in the last 12 months.

The Company's Retail net sales grew 1.1%, whereas its comparable sales decreased 13.6% in Q4 FY17. In parallel, its Wholesale net sales were $456.1 million, which was 22.8% lower. These figures are on a constant currency basis.

The Licensing revenue for the fourth quarter of fiscal 2017 was $33.4 million, which was 6.2% lower.

Geographically, total revenue for Q4 FY17 from Americas was $721.0 million, total revenue from Europe was $215.2 million, and total revenue from Asia was $128.6 million. Asia recorded the highest increase of 96.3% on a reported basis, and an increase of 95.1% on a constant currency basis.

The gross profit for Q4 FY17 was $619.7 million, which was 11.1% lower. MKHL recorded a net loss of $26.8 million, or $0.17 per diluted EPS.

MKHL had 827 Company retail stores plus 133 additional retail stores operated through licensing partners, i.e. a total of 960 Michael Kors stores worldwide as on April 01, 2017

FY17 yearly results

MKHL's ttal revenue for the entire fiscal year 2017 was $4.49 billion, which was 4.6% lower than total revenue of $4.71 billion in fiscal 2016.

Retail net sales for the entire fiscal year 2017 were $2.57 billion, which was 7.4% higher than retail net sales for fiscal year 2016. The Wholesale net sales for the entire fiscal year 2017 were $1.78 billion, which was 17% lower compared to the fiscal year 2016 on a constant currency basis.

Licensing revenue for FY17 was $145.8 million, which was 15.9% lower.

MKHL's net income was $552.5 million for the fiscal year 2017, or $3.29 diluted EPS

Share repurchase program

In Q4 FY17, MKHL repurchased 6,641,815 ordinary shares of the Company for a total value of $250 million. MKHL revealed that it had fully utilized the amount allocated for the share repurchase program for fiscal 2017. The Board of Directors of MKHL authorized a new share repurchase program of $1 billion on May 25, 2017.

Closing of 100 - 125 stores

Given the less than stellar sales performance due to the underperforming stores, MKHL plans to close nearly 100 to125 retail stores within the next two years. The aim is to increase the overall profitability of the Company. MKHL expects to realize an annual savings of approximately $60 million as a result of this decision which will also bring along lower depreciation and amortization costs. The Company will incur a one-time cost of $100 million to $125 million as a result of closing the stores.

The exact locations of the stores that will be closed have not been revealed by MKHL yet. The Company has also not revealed the number of job cuts as a result of the stores closing.

Guidance for 2018

MKHL expects that in Q1 FY18, its total revenue will be in the range of $910 million - $930 million, and diluted EPS in the range of $0.60 - $0.64. Operating margins are expected to be approximately 13%. Comparatively for the entire fiscal 2018, MKHL expects total revenue to be approximately $4.25 billion and diluted EPS in the range of $3.57 - $3.67. Operating margins for the entire fiscal are expected to be approximately 16%.

MKHL has been struggling to turnaround the Company despite various efforts. In 2016, MKHL had planned to reduce its inventory at department stores and stopped participating in storewide promotions and coupons. This was a bid to position itself as a luxury brand and improve its profit margins. However, the recent results point out that MKHL has a long way to go in the current adverse retail environment and increasing competition from its rivals as well as online retailers like Amazon.

Stock Performance

At the close of trading session on Thursday, June 01, 2017, Michael Kors Holdings' stock price marginally declined 0.30% to end the day at $33.08. A total volume of 5.21 million shares were exchanged during the session, which was above the 3-month average volume of 2.23 million shares. Shares of the Company have a PE ratio of 7.50. The stock currently has a market cap of $5.35 billion.

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