Michael Kors Stunning Wall Street Stock Soared 24%

Michael Kors is outstanding in Asian markets including China, where sales in Japan soared by 59.1%, as shown in one of the shops of Michael Kors in Japan.

Following the latest positive results of the first quarter earnings report of the luxury luxury brand Coach, the third quarter of the US Michael Kors in the US time this Tuesday also raised the market temperature of handbags and accessories.

Although many fashion retailers suffered serious challenges during the holidays, Michael Kors's performance is still outstanding.

As of the third quarter of December 26, 2015, Michael Kors brand accessories and clothing had recorded good results, with earnings per share exceeding Wall Street expectations, and local stocks surged 24% to $50 per share on Tuesday.

Prior to Coach's earnings report higher than expected, shares also rose 23.9% in the first five trading days.

Another handbag maker, Kate Spade, also gained 2.9%.

In the third quarter, Michael Kors grew by 7% over the previous year's earnings of $1.59 a share, exceeding the analyst's estimated $1.46 per share, which also rose sharply in the first quarter. The company's earnings per share grew by only 1% last quarter.

According to the results of the report, Michael Kors retail sales increased 11.1% to 766 million 200 thousand US dollars over the previous year. Since the end of the third quarter of 2015, the company has opened 114 new stores.

In addition, the same store sales fell by 0.9%, but Michael's Kors company remained optimistic relative to the FactSet's expected 4.4% decline rate and a 0.9% decline.

Michael Kors spokesman said that profit growth came mainly from the Asian market and e-commerce business, thanks to strong sales in the Japanese market.

By region, sales in Japan increased by 59%, while sales in Europe increased by 14%, but sales in the Americas grew by only 0.4%.

Although the financial report did not disclose the specific sales in the Chinese market

However, some industry sources told fashion headlines that China has become one of the most important potential markets for Michael Kors. As of the third quarter, the performance of Michael Kors in China has increased by at least 20% over the same period of last year. Michael Kors has also extended the experience of successful promotion of social media in the US headquarters, and used digital marketing and bold innovation to capture the market of handbags accessories for young people in China.

Michael Kors CEO John Idol said it is still very optimistic about the Asian market. He pointed out: "the company is still optimistic about China, Japan and South Korea and other Southeast Asian markets. When the industry brings up the brand of Michael Kors, it will be remembered that it is a brand growing in business, though not every quarter as a whole is double-digit growth, but we will continue to grow."

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Because of the depreciation of yen earlier, Japan has become a gathering place for Chinese tourists and purchasing.

Bomoda CEO Brian Buchwald, a consumer intelligence firm, said: "the depreciation of the Japanese yen has attracted many Chinese consumers to travel to Japan, which has further promoted the strong growth of luxury sales in Japan."

In response to Brian Buchwald's comments, John Idol said Michael Kors would step up efforts to attract Chinese consumers in the Japanese market to buy the brand's products.

But Michael Kors is facing a slowdown in Asian economic growth. According to China's economic data, the world's second largest economy is slowing down.

In addition, the RMB depreciated to 10% against the Japanese yen in recent days, and the Japanese retail market has a cooling trend, thus weakening the demand for tourism consumption from China.

According to the company, electricity providers, as the second growth channel of Michael Kors, will further invest in construction.

Michael Kors has started investing in the European market and will open its e-commerce services in 22 European countries, but the company says it does not expect these investments to become a fast growing channel.

John Idol said: "the profit that the electricity supplier brings to the company is lower than that of the physical store. We thought that maybe the profit of the future electricity supplier would exceed the profit of the entity store. But as the industry knows, consumers want to buy products in the electricity supplier, there will be free distribution, free return, exquisite packaging and other services, and now consumers will buy multiple sizes of the same style at a time, and then return the company unsuitable, these factors will increase the operating cost of the company, which is not conducive to the development of the company."

In addition, the company is also faced with consumer handbags and

The demand for products is declining. Despite the double-digit growth of unit sales, the actual demand is decreasing.

John Idol pointed out that Michael Kors began to understand the potential market of small handbags a few years ago, and is capable of facing the challenge. Sales data from actual units show that consumers of Michael Kors products are still increasing.

John Idol also said it would take advantage of the opportunity to introduce more expensive handbags. Data show that consumers are willing to spend more money on unique goods.

As consumers continue to show greater interest in small, cost-effective handbags, John Idol attributed the trend to the development of smartphones, which led to more exposure to consumers.

The company's sales are also trying to persuade consumers to add more products to the shopping basket.

John Idol emphasizes that the focus of Michael Kors is to interact with consumers and find opportunities from the small handbag trend market.

Although the industry has commented on the dilemma of handbag retailing, the handbag market lacks the impetus to promote consumer purchasing.

At least one industry watchdog said.

It has shortened the shelf life of fashion and is killing consumers' buying impulse.

But the latest earnings of many handbag brands may have broken the view of this comment, such as Coach and Kate Spade.

In the past two weeks, handbag brand stocks have seen a new growth. Coach's second quarter earnings also show that earnings exceed analysts' expectations, which gives investors hope that other accessories brands can have the same good results.

Most analysts are satisfied with the pformation of Coach. The company seems to be on the right track under the guidance of CEO Victor Luis and Executive Creative Director Stuart Vevers.

For analysts, they are less generous.

On Tuesday morning's meeting, John Idol hoped that the latest results of the brand could prove to the "opponents" that the brand is still growing.

He pointed out that the future international expansion and the revival of men's clothing market are the two key factors that may drive brand growth. For men's wear, he said that stores could grow from 11 to 500.