High Growth Can Hardly Be Questioned About Coach Or Michael Kors Tomorrow.

The US lifestyle "light luxury" brand Michael KorsHodlings Ltd announced the fourth quarter of 2014 fiscal year and its annual performance before the opening of the US stock market on Wednesday. There was no surprise that Michael Kors continued to achieve high growth in revenue and profits. However, the market has always been vigilant for this "magic" luxury retail stock. As the gross profit margin is likely to be pressurized with expansion, the Michael Kors rose 8% after the opening of the stock market, which has dropped sharply at a time of 4.9%, closing up 1.3% to $97.01, and its concussion continued on Thursday, the highest decline of 5.5%, closing down 2.2%.

The sharp fluctuation of stock prices on the earnings day has cast a shadow over the future of Michael Kors. Although most analysts believe that Michael Kors is still at the initial stage of development, there is still much room for future prospects, but some analysts also express pessimism. Jefferies & Co analyst Randal Konik said in the report, "history reminds us that Coach, Inc. Cox Chi used to be the" crown brand "in the price accessories brand, just like Michael Kors today. Comments suggest that Michael Kors needs to be vigilant against possible future decline even in its early stages of development. Jefferies & Co gave Michael Kors a rating of only $95. The target price of Wells Fargo Securities Wells Fargo securities is $86 US $-96, and analyst Paul Lejuez said in its report that Michael Kors may be slightly harder to start from this fiscal year (2014/2015 fiscal year). Sterne Agee, a broker, gave Michael Kors a neutral price of 100 US dollars, while analyst Ike Boruchow said that the revenue kinetic energy of Michael Kors was undeniable, but profit margins might have peaked and it was hard to win the future.

Tang Xiaotang, a luxury and retail analyst, said the gross margin and the performance of Michael Kors and Coach in the first few quarters were suspicious. There is no doubt that Coach is still the number one brand in the field. Michael Kors still needs time to replace it. In the two quarter, the same store sale of Michael Kors has slowed down sharply (22.9%), which has made many investment banks and brokerages vigilant. Connecting with the recovery of the same store sales and the gross profit margin in the three and fourth quarter, Michael Kors may be gaining the market at the expense of price.

Michael Kors recorded a gross profit margin of 59.9% in the fourth quarter, which was 20 basis points lower than that of 2012/2013 in the same period of fiscal year 60.1%. CEO John D. Idol said in the earnings call conference that the gross profit margin of the quarter (the first quarter of the fiscal year of 2014/2015) may not be as good as expected, and it is expected that the profit margins will be depressed in the next few quarters.

"Under normal circumstances, if income and profit exceed expectations, gross margin should be improved, but Michael Kors is just the opposite." Tang Xiaotang, a luxury and retail analyst, commented that "certainly not necessarily because of the discount, it may be a low price product. Coach did something similar two years ago, reducing the average selling price of $400 to $300. After that, we all saw that Coach's performance in the last year was almost weightless." Tang Xiaotang said that in any form, the ultimate brand value will be affected.

LVMH Mo, t Hennessy Louis Vuitton SA, MOET & CHANDON Hennessy LV Group Chairman and chief executive Bernard Arnault has interviewed several times that it does not accept the "light luxury" brand such as Michael Kors as a luxury industry. The brand is not exclusive, and it is easy to expand in a certain period and then very recession. But he said that "light luxury" has its specific market, but it is very difficult for a brand to last.

Herb Greenberg, a financial investment columnist, quoted her friend's comments on her famous blog, Reality Check, as saying: "discount is a discount. Once you need to sell products through discount, it is very difficult to sell when there is no discount." In view of the super expected performance and low gross margin of the fourth quarter Michael Kors, Herb Greenberg even called Michael Kors Hodlings Ltd. (NYSE:KORS) is suspected to transfer the stock through the Michael Michael Kors Michael of the affiliated company.

Michael Kors Far East Holdings Limited is a company jointly owned by Michael Kors Hodlings Ltd. founder Michael, chief executive officer, chief executive officer, and shareholders. Michael Kors and KORS Michael Kors The three brands are trademark rights, Greater China operation rights and Asian agents, until March 31, 2041.

"This kind of Pattern It has been hidden in retail business. If it works well, there is no problem, but once the problem of sales and inventory is exaggerated, it will be very bad for the company. A similar case has been reported by the Guangdong media about the transfer of Metersbonwe stock, which is a direct result of the announcement of the suspension. It may be more serious in the United States and will be investigated by SEC. It is true that there will be tens of millions or even hundreds of millions of dollars in fines. Luxury and retail industry analyst Tang Xiaotang said.

Despite this concern, Goldman Sachs Goldman Sachs and Deutsche Bank Deutsche Bank still raise the target price of Michael Kors after the fourth quarter earnings, which is derived from Michael Kors in the current fiscal year, higher than analysts' average expected EPS.. However, Deutsche Bank Deutsche Bank analyst Dan also said: "if the global macroeconomic environment is deteriorating further, or management can not complete the established tasks", the risk still exists.