Luxury brand Michael Kors lowers its revenue and earnings forecast for the year ending March 2016 as consumer demand declines. Shartia Brantley reports.
A tough quarter for Michael Kors. The retailer reported its slowest quarterly revenue growth since it went public in December 2011. However… revenue did beat expectations while it's profit came in a bit light. Demand for its handbags and accessories especially weak in North America where same-store sales fell nearly 7-percent. Analysts expected a gain of more than 4-percent. Margins also fell as the retailer tried to lure shoppers with heavy discounting. While rivals Coach and Kate Spade have scaled back on promotions to boost their bottom line, Michael Kors has expanded heavily with new stores and distribution channels with retailers such as Macy's and has plans to continue to do so. Michael Kors CEO John Idol: "We see multiple top line growth opportunities through international expansion, digital e-commerce flagships, new store openings and additional shop-in-shop conversions in our wholesale channel. We plan to expand upon our ready-to-wear and footwear categories and fully develop our global men's business." Despite its expansion plans, the retailer cut its revenue and earnings forecast for the year ending March 2016. Shares plummeted in pre-market trading.