The Michael Kors share fell more than eleven percent after the handbag manufacturer posted weaker sales in its retail stores in Europe in the second quarter of the fiscal year. This was Kors missed for the first time in almost two years, the quarterly sales expectations of analysts.
CEO John Idol said in a statement that Kors' recently announced plans to acquire Versace "are creating the conditions for accelerating revenue and earnings growth," as the company continues to seek a foothold in Europe. The company announced the $ 2.1 billion deal in September. After signing the contract, Kors will change its name to Capri Holdings.
Kors has announced that it will increase Versace's global revenue of $ 2 billion and increase its brand presence from around 200 to 300 stores. It is also expected that accessories and footwear will be expanded from 35 percent to 60 percent of sales.
The brand Jimmy Choo, which Kors acquired last November, posted stronger sales than expected in the last quarter thanks to the strong shoe strength. As a result, Kors increased its guidance for adjusted earnings per share for the year by 5 cents to $ 4.95 to $ 5.05. It continues to expect total revenue of approximately $ 5.13 billion, with sales in the same retail business in the low single digits range.
By Tuesday, Kors shares had fallen by about 8 percent so far this year.