| Stock (Symbol) | Stock Price | |
Michael Kors (KORS) |
$69 |
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| Data is as of | Expected to Report | Sector |
February 23, 2015 |
May 26 – June 01 |
Retail & Travel |
| Sharek’s Take | ||
 Michael Kors’ American business might be turning negative. U.S. same store sales (SSS) growth has slowed from 24% to 16% and now 6% during the last year, and analysts feel SSS growth could go negative. Negative SSS would mean business in the U.S is deteriorating and would make KORS an International story. Sales also missed estimates last qtr, the 1st time this happened as a public company. Personally, I feel the products KORS is putting out aren’t cutting edge like they used to be, and don’t think the brand is as strong as it once was. Overseas Michael Kors continues to see strong demand, and the new U.S. e-commerce site is doing well, so not everything is bad. At just 14x earnings the stock is cheap and has good upside, but lacks a catalyst that can push it higher. |
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| One-Year Chart | ||
 The stock has had a terrible year, even though profit growth was rapid. Estimates of +18% and +15% make me think the fast growth days are behind us. P/E of 14 — wow. A P/E of 20 — which is reasonable — would have this stock at $96. |
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| Earnings Table | ||
 Sales grew a solid 30% last qtr as profit growth was 33% but the slowing U.S. demand is really what’s on everyone’s mind.KORS beat the street by 14 cents but still that didn’t help the stock. Annual Profit Estimates increased for 2014 (which ends in March) and fell a bit for 2015 & 2016. Teens profit growth is expected the next few qtrs. KORS usually beats so maybe 20% to 25% growth is coming. |
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| Fair Value | ||
 This stock hasn’t been priced right since 2011 — the year of its IPO. My target P/E of 18 is so reasonable — and would make the stock jump to $86. |
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| Ten-Year Chart | ||
 I really wish momentum would turn up with this stock, it seems to have a never-ending supply of sellers. Profit growth is good, stock price isn’t. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
18 of 24 |
Michael Kors is in a rut and probably won’t find relief until U.S. same store sales stop falling. At this point KORS is more of an International story. But still, at 14x 2015 earnings any bounce the stock might have would be meaningful. Michael Kors drops from ranking 9th to 18th in the 24 stock Growth Portfolio Power Rankings. I recently sold it from the Aggressive Growth Portfolio because it is no longer a top growth stock. |
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Aggressive Growth Portfolio
N/A |
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