Stock Of The Day – Michael Kors Holdings (KORS)February 04, 2014
By Uncategorized in
We thought we would take a closer look at Michael Kors Holdings today as the stock is up an impressive 18% this morning on the back of increasing fiscal year guidance once again.
What Do They Do:
According to their website, Michael Kors is a global luxury retail company. They have two main divisions: the Michael Kors luxury collection and the MICHAEL Michael Kors accessible luxury collection. In recent years the company has moved beyond just apparel into handbags, small leather goods, eye wear, jewelry, watches and football. They have a presence in 74 countries.
How Has The Stock Performed:
Prior to today’s jump, the stock was up about 38% over the past year, however, it was down 7% over the past month.
How Are The Fundamentals:
KORS has middle of the pack gross margins relative to their competitors but they are able to extract a higher EBITDA margin than everyone except for Coach and Burberry. KORS cash flow generation, both operating and FCF, are about average for their sub-industry. Finally, like many Apparel, Accessories & Luxury Goods firms KORS overall has a very strong balance sheet. They don’t have any debt and have net debt of -35%.
What Do Valuations Looks Like:
Valuations are very rich. Only Under Armor is in their same stratosphere in regards to valuations. This obviously then is not a value story and the growth expectations baked in are in line with this being a growth story.
Tags > KORS, MSCI World