Global luxury lifestyle brand Michael Kors Holdings Limited had an exceptional fiscal 2014 first quarter ended June 29 with a total revenue of $641 million, a 54.5% increase from $414.9 million in the first quarter of fiscal 2013.
Retail net sales increased 51.5% to $325.7 million driven by a 27.3% increase in comparable store sales and 75 net new store openings since the end of the first quarter of fiscal 2013. Wholesale net sales increased 59.3% to $290.6 million and licensing revenue increased 40.7% to $24.6 million.
Gross profit increased 58.3% to $397.3 million, and as a percentage of total revenue increased to 62% compared to 60.5% in the first quarter of fiscal 2013.
“Our exceptional first quarter financial results demonstrate the sustained strong demand for the Michael Kors luxury brand. We attribute the ongoing momentum to our fashion design leadership combined with an aspirational jet-set luxury in-store experience,” said John D. Idol, the company’s chairman and CEO. “As we continue to successfully execute on our strategic initiatives, we remain excited about our future growth potential.”
Income from operations was $197.6 million, or 30.8% as a percentage of total revenue, as compared to $111.9 million, or 27.0% as a percentage of total revenue, for the first quarter of fiscal 2013.
Net income was $125 million, or $0.61 per diluted share. Net income for the first quarter of fiscal 2013 was $68.6 million, or $0.34 per diluted share.
As of June 29, the company operates 328 retail stores, including concessions, compared to 253 retail stores, including concessions, at the end of the same prior-year period. The company has 114 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 442 Michael Kors stores worldwide at the end of the first quarter of fiscal 2014.
“The strong performance in our retail, wholesale and licensing segments as well as across geographies led to record operating profits,” added Idol. “North American comparable store sales increased 25%, as our luxury accessories and ready-to-wear offering and jet-set in-store experience continue to resonate strongly with consumers. Sales in our North America wholesale segment increased 50%, driven by comparable store sales growth as well as the continued successful conversion of shop-in-shops in department stores. In Europe, sales grew 144% in the first quarter, as growing brand awareness led to comparable store sales growth of 56%. Finally, in our licensing segment, revenue increased 41%, driven primarily by the strength in watches and eyewear. Overall, we remain extremely pleased with Michael Kors’ positioning within the growing global luxury lifestyle market and the advances we are making on our strategic growth initiatives.”