Michael Kors reported a bigger-than-expected drop in comparable sales as mall traffic continued to fall, and the strong dollar discouraged tourist spending. Bobbi Rebell reports.
Blame it on the internet. Michael Kors reporting a bigger-than-expected drop in quarterly comparable sales. Fewer shoppers visited malls as online shopping continues to grow, and the strong dollar discouraged tourists from spending on its handbags and accessories. Kors also forecast current quarter sales below analyst forecasts. Revenue did rise slightly in the quarter and was above estimates. David Schick of Consumer Edge Research, points out the company's expense controls offset the slower comparable sales, writing in a note "Generally we like retailers and brands to take their medicine on costs and inventory, KORS appears to have done some of that here." Kors, along with other luxury brands, have been tightening supply to department stores to avoid deep discounting on their products, which they fear will erode their brand value.