hnnhcronin Michael Kors comparable store sales dropped 14% in the most recent quarter ending May 31st while reporting a net loss of $26.8 million or a loss of 17 cents per share. Just one year ago, the company reported a net income of $177 million, or 98 cents per share. The products sold at Michael Kors seem to be unexciting to consumers. Michael Kors forecasts that 2017 will be a difficult year. The brand expects same-store sales and quarterly earnings to continue to tumble throughout the rest of 2017.
Much like other retailers, Michael Kors performance has been hurt by the declining foot traffic in the retailer’s brick and mortar stores. As a result of this trend, Michael Kors announced that it plans to close 100 to 125 of its non-outlet stores by 2019. The company expects that the store closures should create a more profitable environment as the company closes its underperforming stores. At its peak popularity, Kors pursued a plan of aggressive expansion, resulting in 827 store locations., Now faced with lagging sales, a perception of being too accessible to the public is resulting in a strategic change of direction.
Sources:
“Michael Kors Holdings Limited Announces Fourth Quarter and Annual Fiscal 2017 Results.”Michael
Kors – Financials – Quarterly Reports, 31 May 2017, investors.michaelkors.com/financials/quarterly-reports/default.aspx.
Thomas, Lauren. “Michael Kors Plans to Shutter 100 to 125 Stores; Shares Tumble 9%.”CNBC,
CNBC, 31 May 2017, www.cnbc.com/2017/05/31/michael-kors-reports-fourth-quarter-earnings.html.
