Michael Kors Shares Plunged Into Jail

Michael Kors has been singing to the top of 101.04 in early 2014 after issuing a price of $20 in 2011. It rose to 40% in the first two months of 2014. However, in the second half of 2014, the stock market plunged sharply after the two quarter earnings, and the annual cumulative decline was about 7%.

2014 is a "cold winter night" for the retail industry, especially for the fashion industry. The economic recovery in Europe and the United States is slow; the warm winter caused by El Nino; China's economic slowdown and anti-corruption;

The geopolitical tension of Ukraine, Southeast Asia and other places, and the reduction of consumption of tourism win win network brought by the above situation has brought a particularly heavy blow to the industry that has been in trouble.

Therefore, Michael Kors Kors attributed the slow down of same store sales in the two quarter and the three quarter to the fact that "shopping mall flow reduction" and "low consumption mood" can be regarded as a fact expression, but...

The two reasons have not only appeared in this quarter, but even in the current fiscal year. The same reason may be used to explain the problem of Coach, but Coach Coach is even worse. SSS of the company does not say that the growth has slowed down. It has been a double-digit decline for several quarters.

However, it is impossible for industry analysts to evaluate Michael Kors by evaluating the standard of Coach Cox. Therefore, Coach SSS's North American SSS has plummeted by 24%, but its performance is better than Wall Street's expectation. On the contrary, Michael Kors even though its performance exceeds expectations, there will be panic or retaliatory decline in stock price as long as gross margin or SSS SSS exists anywhere. This is the logic of Wall Street and investors.

This logic is also reflected in the investment bank's report. Goldman Sachs Goldman Sachs analyst Lindsay Drucker Mann's report indicates that the slowdown in the industry will have to reduce the growth expectation of Michael Kors, but Michael, Kors and other new luxury brands are still rising.

The share of loss.

Jefferies LLC analyst Randal Konik of the investment bank even said that the fall in share prices could allow investors to enter the market. Once the scale of the European market is large, it will catalyze the brand.

In the same way, BMO Capital Markets analyst John Morris concluded that the growth of Michael Kors is not enough to offset the brand slowdown in North America, because the share of the North American market is 8.

The investment banks also adjusted their stock ratings of Michael Kors.

The latest quarterly earnings and peers' achievements show that the whole luxury industry is facing challenges and growth is slowing down.

As of the two quarter of September 27, 2014, Michael Kors sales increased by 16.4% in the same store, of which the growth rate in the North American market was only 10.8%, and two data were far below the 19% and 15% expected by analysts, which was significantly lower than the 24.2% in the first quarter.

Michael Kors's inventory, promotions and profit margins have problems over the past 1 years. The industry's concern about the group is the main reason for the poor performance of the company's stock price.

Due to the rapid expansion of Michael Kors, the brand of Cheap has become more and more popular in the industry. The price of "Cheap" of Michael Kors has been reflected in the price of luxury goods, popularity and popularity in recent two years, and the gross profit rate, which reflects the current situation of the brand. Its expansion speed in Europe and Japan has also made the brand more Cheap. What is the situation of the three digit growth? In Europe, the number of stores in the last fiscal year is 80, while the current fiscal year will increase by 55, and the growth rate will reach 70%. Besides, there are also the existence of e-commerce business, all of which lead to high inventory of Michael Kors, and the growth rate has exceeded sales growth continuously.

Although there is a certain expansion factor in inventory, Michael Kors is too optimistic about sales growth. This year, Q1 has to promote sales and gross margins through some discounts.

The real problem with expansion is high inventories. The company's inventory growth was higher than sales growth in the previous quarter.