Michael Kors misses revenue estimates as European sales take hit
Wells Fargo Senior Global Equity Strategist Scott Wren on the state of the U.S. markets and economy.
Nov 7 (Reuters) - Michael Kors missed Wall Street's quarterly revenue estimates for the first time in almost two years, as the luxury hand-bag maker recorded lower sales at retail outlets in Europe, where it is trying to gain a stronger foothold.
Shares of the company fell 11.3 percent to $50.97 in premarket trading on Wednesday following the news.
Revenue from Kors' European retail stores fell nearly 10 percent during the quarter ended September, leading to total retail revenue of $643.9 million.
The result missed analysts' average estimate of $661.1 million, according to IBES data from Refinitiv.
Kors has been reducing inventory at its European stores to create exclusivity for its products in a region where wealthy fashion consumers have long preferred local luxury brands from LVMH and Gucci parent Kering.
In order to better compete with peers in Europe, Kors is spending over $2 billion to buy Italian luxury designer Versace.
Kors said quarterly net income attributable to the company fell to $137.6 million from $202.9 million a year earlier.
Total revenue rose 9.3 percent to $1.25 billion, falling short of analysts' expectations of $1.26 billion. The miss was the first since the quarter ended December 2016.
Excluding one-time items, the company earned $1.27 per share, above analysts' estimates of $1.10 per share. (Reporting by Uday Sampath in Bengaluru Editing by Sai Sachin Ravikumar)