The Market Is Bad. The Stock Is Too High. The Share Price Of Michael Kors Is Down.

Recently, Credit Suisse analyst Christian Buss lowered the rating of Michael Kors Holdings (NYSE:KORS) from original "buy" to "neutral", and the stock price in December is expected to be adjusted from $103 to $79.

The next day, the share price of Michael Kors fell down, opening at $69.34 and closing at $66.87, down 8.4%, the lowest in two months.

For this downgrade, the reason Christian Buss gave is: inventory is rising, while sales continue to be weak.

Forced to sell goods at a reduced price.

"The spread of Michael Kors's discount in first-line department stores is becoming more and more worrying."

Christian Buss explained in detail that in October last year, Michael Kors's discount products accounted for 5%, and by December it had surged to 31%.

In the past month, almost 65% of the handbags in the official website have been sold at a reduced price.

Although it is Christmas promotion season, Michael Kors is still the largest "discount scale" of the 6 handbag brand websites he studied.

In fact, as early as last November, when the company released its second quarter earnings report, the trend of Michael Kors growth slowed down.

As of September 27, 2014, the sales revenue of Michael Kors increased by 42.7% from 740 million 300 thousand US dollars to 1 billion 60 million US dollars.

Although growth figures are still positive, Michael Kors is the lowest in the last four quarters, and sales in North America, which accounts for 80% of sales, is slowing down.

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In addition, the same store all over the world

The growth rate is only 16.4%, not up to 19%, which is much lower than 24.2% in the first quarter.

In North America, its biggest market, sales grew by only 10.8%, far from 18.7% in the previous quarter.

No investor likes growth slows down, not to mention Michael Kors's recent expansion of stores and discount promotions to remind people of its rival Coach, who worries that it is getting farther away from the luxury of luxury.

As we all know, because of the crazy expansion of Coach in the past few years and the promotion of promotional cards, the market has been saturated, the brand value has been diluted, and sales and profits have both declined.

In 2011, Michael Kors, a listed NYSE, pursued the development plan of making high-end fashion brands, but at the same time giving consideration to the public, because only by "democracy" can it be sold.

Compared with luxury goods, the more acceptable price has become the most important reason for Michael Kors's rapid expansion in the global market of luxury goods.

In the past 12 months, Michael Kors has opened 121 new stores.

The number of stores in Europe is 80, and the fiscal year will increase by 55 to 70%.

In addition, the brand recovered the electricity supplier business from the third party in September last year, all of which resulted in the increase of brand stock, so it had to be promoted through some discounts.

Janney Capital Markets, a broker, issued a warning in October last year to reduce the rating of Michael Kors from "buy" to "neutral".

Analyst Adrienne Yih-Tennant said she expressed concern about sales in North America, which accounted for 80% of the company's sales, and the US market was becoming saturated. The decline in sales in the region could not be quickly offset by the European sales of 20% of the total sales, because European business was still at an early stage of growth.

She also said the company added stores and

Such investments may increase operating costs.

For the third quarter earnings report to be announced in February this year, Michael Kors expects total revenue to grow to two US digit growth of 1 billion 270 million US $-13 billion.

In November, John D.Idol, chairman and chief executive officer of Michael Kors, and a conference call held by Wall Street analysts said, "the traffic volume of shopping malls must be reduced.

We have seen it in the past few quarters, but it is more significant than we expected in the quarter. We did increase traffic in the same store, but it was not as high as we originally expected. "