May 28 - Michael Kors posts strong quarterly earnings and revenue, but some analysts are concerned profitability growth has begun to slow. Fred Katayama reports.
Bad weather didn't stop customers from shopping and splurging at Michael Kors stores. Quarterly profit jumped 59 percent as American consumers snapped up its trendy handbags and watches. Robust comparable store sales and the addition of more than 100 stores boosted revenue. This momentum comes on top of its strong sales during the holiday season. Founded by designer Michael Kors, the company's fashions are worn by the likes of First Lady Michelle Obama and actress Gwyneth Paltrow. The retailer has been crushing archrival Coach at the sales counter and in the stock market. Its stock, which joined the S&P 500 index in November, fell at the start of trading. But over the last 12 months, Michael Kors' shares have risen 54 percent while Coach's shares have dropped 29 percent. Michael Kors forecast revenue for the current quarter that surpassed Wall Street's estimates. Some analysts expressed concern that Kors' profitability growth has begun to slow. But Buckingham Research analyst David Glick said, "...the very high quality fourth quarter beat and conservative fiscal year 2015 guidance in-line with the Street should alleviate investors' concerns that sales and margin trends may be decelerating."