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Analysts say the shortfall for the second quarter of the fiscal period of Michael Kors Holdings Ltd. in the second quarter was particularly worrisome, according to badysts: shortly after the announcement of the acquisition of Versace.
Michael Kors
KORS, – 14.62%
whose portfolio also includes the eponymous brand and Jimmy Choo, said a total business figure of $ 1.25 billion, up compared to $ 1.26 billion the consensus pbaded by the FactSet.
Shares are down 15.3% in trading on Wednesday.
The Michael Kors brand's turnover decreased by 0.8% and same-store sales dropped to less than 10%.
"The Decline in the Core Value of Michael Kors The company recently announced the acquisition of Versace – a problem that was already a concern for many investors – and Michael Kors is now on an unfavorable trajectory as they are on the verge of mingle with an agreement that should materialize. Dilute a single-digit figure until the first year, "wrote Wells Fargo badysts headed by Ike Boruchow.
The $ 2.1 billion contract to buy Gianni Versace SpA was announced on September 25th.
Michael Kors has acquired Jimmy Choo about a year since.
Read: Michael Kors fought to recover an upscale image – but is he ready to use Versace?
The Michael Kors brand withdrew from the wholesale sector to reduce the number of product discounts and protect the health of the brand, a step also taken by Tapestry Inc.
TPR, -0.07%
Brand of coaches.
According to Wells Fargo, the latest results represent a step backward for the Michael Kors brand and raise questions about its future from 12 to 18 months.
"[G] Michael's market downturn The Kors brand and the upcoming dilution of mergers and acquisitions, the next year's EPS is likely to decline in the absence of a change in trajectory Wells Fargo said,
Michael Wells Fargo's Michael Kors stock market prices have a target price of $ 50 from $ 74. [A] After slowly advancing on the steep slope of the recovery, Michael Kors now seems to be moving in the opposite direction, "wrote Neil Saunders, Managing Director of GlobalData Retail.
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Saunders is also said " cautious "about the acquisition of Versace because the brand Michael Kors has yet to establish a clearer positioning of the brand to justify the status of" luxury ".
"This will dissuade some potential customers and thus limit the growth of some consumer segments in search of a more refined label," he said.
The Versace agreement could distract attention.
"While there may be economies of scale and the power of this name pushes Michael Kors into the luxury pack, the deal could be an additional source of distraction for solving fundamental problems. of the main mark. , Writes Saunders.
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"Despite its status, Versace is also not a brand at the top of health: there is work to be done to boost sales and revitalize the business. "
Michael Kors shares have fallen 22.8% since the beginning of the year, while the S & P 500 index
SPX, + 2.12%
gained almost 5% for the period.
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