Coach's Dud Won't Sink Michael Kors

Actavis In Buy Range; Kors, Regeneron Set Up In Bases





If folks aren't aping celebrities in paying at least $158 for a pair of jeans at Joe's or $458 for a leather satchel at Coach, aren't all premium retailers in trouble? No. For starters, Kors is growing a lot faster than Coach or Joe's Jeans. Revenue at Kors surged 57% in its previous quarter, with net income more than doubling. The key catalyst here was a 37% spike in comparable-store sales. If you think that's something, comps soared 41% during the quarter before that. It would be a major shock if Kors follows Coach and Joe's Jeans into negative comps next week.





Michael Kors: Retail's next billion-dollar man





"It's the big opportunity for Michael Kors, growing stores, as that means a lot of runway for them to grow for at least two or three more years," said Chen. Comparable-store sales rose 41 percent in North America in the October-December holiday quarter, while larger rival Coach said last month same-store sales fell 2 percent in North America, only its third decrease in 11 years. "They (Michael Kors) are gaining market share from Coach, but it's not only Coach - it's also the little guys that are getting squeezed in a highly competitive market," Morningstar analyst Paul Swinand said. POPULAR ACCESSORIES Chen, the Citi analyst, said that Michael Kors' popularity as a brand allowed the company to be more flexible in pricing than its rivals. He said its focus on smaller handbags and accessories also presented a particular challenge to Coach. Michael Kors Chief Executive John Idol said there was strong demand for luxury items in the third quarter from Europe and North America. He said he expected the global luxury market to keep growing at the same pace, without specifying a timeframe. The Luxury Goods Worldwide Market Study of 2012 estimated that the global luxury goods market would grow to between $314 billion and $327 billion in 2015 from $251 billion in 2011. The lure of a new brand in the market has also driven growth for Michael Kors in the relatively weak European market. Comparable-store sales in Europe rose 58 percent in the third quarter, the company said.









("Holy crap," he told the Daily Beast at the time.) But in truth it was just the latest in a surge of events marking Kors' recent ascendance. For the past few years his business has been growing rapidly. After impressive department store expansion (in some of the hundreds of department stores in which his brands are sold, he's in as many as five separate departments), he is in the midst of a massive rollout of his own retail stores. As a sassy, quip-happy judge on the wildly successful "Project Runway" reality show, now in its eighth season, Kors has become a household name. Last year Michelle Obama chose a Kors-designed black sleeveless sheath for her official White House portrait.





Handbags, watches fashion Michael Kors upbeat forecast





Some are setting up for potential moves higher. A market rally needs Michael Kors Handbags Outlet broad leadership, and there's plenty of it. Actavis ( ACT ), formerly known as Watson Pharmaceuticals, cleared a flat base last week, rising 6% in strong trade. The generic drug maker is still within range, less than 1% past a buy point of 133.10. The company's second-quarter earnings report last week showed accelerating growth from the first quarter, with profit up 42% from a year ago to $2.01 a share. Sales rose 47% to $1.99 billion. In May, Actavis agreed to acquire Irish drugmaker Warner-Chilcott ( WCRX ) for roughly $8.5 billion.