Michael Kors on Track to Threaten Coach, Inc.

Michael Kors (KORS) is on the Right Course

Much of the companys growth can be attributed to expanding market penetration both domestically and abroad, a well-diversified and appealing product line, and mounting brand recognition worldwide. Favorable economic conditions will further amplify KORSs trend of stunning earnings growth in the upcoming quarters. With US consumer confidence recently hitting six-year highs, consumers are loosening their purse strings and are likely to indulge in accessible luxuries from retailers like Michael Kors. Positive employment data is another bullish sign for the consumer retail market that bodes well for the company. Market IQ pro metrics give KORS a neutral rating. Market IQ characterizes KORS as high quality but low value stock (see below). Click to enlarge The above Quality Value chart consists of the following comparable companies: Michael Kors, Fifth and Pacific Companies, Inc. web site ( NYSE:FNP ), Coach, V.F. Corporation ( NYSE:VFC ), and Ralph Lauren Corporation ( NYSE:RL ).

They claim that the discount retailer is falsely advertising its handbags at bargain prices. Costco send out a nationwide Mother's Day email on April 16, promoting the designer handbags with prices starting at $99.99. Michael Kors says one of the images included a shot of its signature "MK" logo. But, Costco doesn't sell the label! Kors wants the court to put an end to what they believe is false advertising. Tiffany and Company filed a similar suit against the store in February. Upscale Designer Brand Suing Costco More>>

Upscale Designer Brand Suing Costco

ROE increased to 32.1% in fiscal Q4 2013 vs. in fiscal Q4 2012. Additionally, KORS offers a higher ROE relative to the peer average of 12%. KORS maintains an adequate Interest coverage ratio of 22, which demonstrates the firm's ability to maintain its short-term obligations. Based on Market IQ's Valuation metrics, KORS is trading at a high premium.