Opening more stores and strong growth in its online business boosted sales at the handbag retailer. Kors will buy back $1 billion of its shares. Fred Katayama reports.
Michael Kors had been struggling, but the fashion retailer posted its strongest quarterly sales growth in a year. Kors gaining shoppers through the growth in the number of its stores and its sales online. Plus sales at its stores open at least a year rose more than expected. The company's sales growth had been slowing because its brand had lost some of its exclusivity as more department stores and outlets stocked its namesake handbags. To boost sales, Kors has been refreshing its product lines faster and pushing deeper into online retail. Now, Kors says it'll buy back $1 billion in shares and buy its exclusive licensee in China. The company sees Asia growing into a $1 billion market for its goods. Kors shares, down 25 percent over the past quarter, rose sharply in early trading. The report wasn't all bright. Mizuho analyst Betty Chen said, "Looking forward, the Greater Chinia license acquisition is encouraging but underlying demand in North America continues to weaken." The strong dollar bit into profit, which fell. Kors issued a weak outlook for the current quarter and sees flat revenue for the fiscal year.