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| 8-K - FORM 8-K - Capri Holdings Ltd | d545727d8k.htm |
Exhibit 99.1
MICHAEL KORS
Michael Kors Holdings Limited Announces Fourth Quarter and Annual Fiscal 2013 Results
Fourth Quarter Total Revenue Increased 57.1%; Comparable Store Sales Increased 36.7%
Fourth Quarter Reported Diluted EPS Increased 123.9% to $0.50
Hong Kong —May 29, 2013 — Michael Kors Holdings Limited (NYSE:KORS) (the “Company”), a global luxury lifestyle brand, today announced its financial results for the fourth quarter and fiscal year ended March 30, 2013.
John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “Fiscal 2013 was another outstanding year for Michael Kors with continued momentum into the fourth quarter reflecting advances on our key growth strategies. Our jet-set luxury accessories and ready to wear are resonating with consumers worldwide and we are excited by our prospects for future growth.”
For the fourth quarter ended March 30, 2013:
| • | Total revenue increased 57.1% to $597.2 million from $380.0 million in the fourth quarter of fiscal 2012. |
| • | Retail net sales increased 58.8% to $272.7 million driven by a 36.7% increase in comparable store sales and 67 net new store openings since the end of the fourth quarter of fiscal 2012. Wholesale net sales increased 59.4% to $304.7 million and licensing revenue increased 15.7% to $19.8 million. |
| • | Gross profit increased 62.6% to $356.2 million, and as a percentage of total revenue increased to 59.7% compared to 57.7% in the fourth quarter of fiscal 2012. |
| • | Income from operations was $155.3 million and as a percentage of total revenue was 26.0%. For the fourth quarter of fiscal 2012, income from operations was $78.8 million and included a $2.0 million reimbursement of professional fees associated with the Company’s initial public offering (“IPO”) in December 2011. Excluding this credit, operating income for the fourth quarter of fiscal 2012 was $76.8 million or 20.2% as a percentage of total revenue. |
| • | Net income was $101.1 million, or $0.50 per diluted share, based on 203.8 million weighted average diluted shares outstanding. Net income for the fourth quarter of fiscal 2012 was $43.6 million, or $0.22 per diluted share, based on 196.9 million weighted average diluted shares outstanding. Excluding the aforementioned credit, net income for the fourth quarter of fiscal 2012 was $41.6 million, or $0.21 per diluted share. |
| • | At March 30, 2013, the Company operated 304 retail stores, including concessions, compared to 237 retail stores, including concessions, at the end of the same prior-year period. The Company had 96 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 400 Michael Kors stores worldwide at the end of the fourth quarter of fiscal 2013. |
Mr. Idol continued, “Our robust fourth quarter results were driven by continued strength across all of our business segments and geographies. North American comparable store sales increased 35%, reflecting the increasing demand for our luxury brand, our exciting product assortment and our exceptional jet-set in-store experience. Sales in our North America wholesale segment increased 57%, reflecting comparable store sales growth as well as the continued conversion to shop-in-shops in department stores. In Europe, sales nearly doubled during the quarter, with continued expansion of brand awareness leading to 63% comparable store sales growth. Finally, in our licensing segment, revenue increased 16%, driven primarily by the ongoing strength in watches and eyewear. Overall, we believe that the Michael Kors luxury brand is ideally positioned within the global luxury lifestyle market and we look forward to continuing to advance on our long-term objectives in fiscal 2014 and beyond.”
MICHAEL KORS
For the fiscal year ended March 30, 2013:
| • | Total revenue for the year increased 67.5% to $2.2 billion from $1.3 billion in fiscal 2012. |
| • | Retail net sales increased 69.5% to $1.1 billion. Comparable store sales increased 40.1%. Wholesale net sales increased 69.2% to $1.0 billion and licensing revenue increased 33.5% to $87.0 million. |
| • | Gross profit for the year increased 73.5% to $1.3 billion, and as a percentage of total revenue increased to 59.9% as compared to 57.8% in fiscal 2012. |
| • | Income from operations for the year was $630.0 million and as a percentage of total revenue was 28.9%. For fiscal 2012, income from operations was $247.7 million and included a $10.6 million equity compensation charge associated with equity grants for periods prior to fiscal 2012, $3.2 million in expenses associated with the Company’s IPO in December 2011 and a $10.7 million charge related to the employee share option redemption associated with our private placement. Excluding these charges, income from operations for fiscal 2012 was $272.1 million, or 20.9% as a percentage of total revenue. |
| • | Net income for the year was $397.6 million, or $1.97 per diluted share, based on 201.5 million weighted average diluted shares outstanding. Net income for fiscal 2012 was $147.4 million, or $0.78 per diluted share, based on 189.3 million weighted average diluted shares outstanding. Excluding the aforementioned charges, net income for fiscal 2012 was $163.1 million, or $0.86 per diluted share. |
Outlook
For the first quarter of fiscal 2014, the Company expects total revenue to be in the range of $555 million to $565 million. This assumes a comparable store sales increase of approximately 20%. Diluted earnings per share are expected to be in the range of $0.46 to $0.48 for the first quarter of fiscal 2014. This assumes 204.0 million diluted weighted average shares outstanding and a 36% tax rate.
For fiscal 2014, the Company expects total revenue to be in the range of $2.65 billion to $2.75 billion. This assumes a comparable store sales increase in the range of 15% to 20%. Diluted earnings per share are expected to be in the range of $2.43 to $2.47 for fiscal 2014. This assumes 204.8 million diluted weighted average shares outstanding and a 36% tax rate.
Conference Call Information
A conference call to discuss fourth quarter results is scheduled for today, May 29, 2013 at 8:00 a.m. EDT. A replay of the call will be available today at 11:00 a.m. EDT; to access the replay, dial 1-877-870-5176 for domestic callers or dial 1-858-384-5517 for international callers and enter access code 5780735. The conference call will also be webcast live in the investor relations section of www.michaelkors.com. The webcast will be accessible on the website for approximately 90 days after the call.
About Michael Kors
Michael Kors is a world-renowned, award-winning designer of luxury accessories and ready to wear. His namesake company, established in 1981, currently produces a range of products through his Michael Kors and MICHAEL Michael Kors labels, including accessories, footwear, watches, jewelry, men’s and women’s ready to wear, and a full line of
MICHAEL KORS
fragrance products. Michael Kors stores are operated, either directly or through licensing partners, in some of the most prestigious cities in the world, including New York, Beverly Hills, Chicago, London, Milan, Paris, Munich, Istanbul, Dubai, Seoul, Tokyo and Hong Kong.
Forward Looking Statements
This press release contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Forward-looking statements include information concerning the Company’s possible or assumed future results of operations, including descriptions of its business strategy. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “seek,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. The forward-looking statements contained in this press release are based on assumptions that the Company has made in light of management’s experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors that it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors are more fully discussed in the “Risk Factors” section and elsewhere in the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2012 (File No. 001-35368), filed on June 12, 2012 with the U.S. Securities and Exchange Commission, as updated by the risk factors set forth in the Company’s Registration Statement on Form F-3 (File No. 333-186745), filed on February 19, 2013.
CONTACTS:
Investor Relations:
ICR, Inc.
Jean Fontana/Megan Crudele
646-277-1214
jean.fontana@icrinc.com
Media:
ICR, Inc.
Alecia Pulman
203-682-8224
alecia.pulman@icrinc.com
MICHAEL KORS
SCHEDULE 1
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
| March 30, 2013 |
March 31, 2012 |
March 30, 2013 |
March 31, 2012 |
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| Net sales |
$ | 577,379 | $ | 362,905 | $ | 2,094,757 | $ | 1,237,100 | ||||||||
| Licensing revenue |
19,775 | 17,085 | 86,975 | 65,154 | ||||||||||||
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| Total revenue |
597,154 | 379,990 | 2,181,732 | 1,302,254 | ||||||||||||
| Cost of goods sold |
240,939 | 160,868 | 875,166 | 549,158 | ||||||||||||
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| Gross profit |
356,215 | 219,122 | 1,306,566 | 753,096 | ||||||||||||
| Total operating expenses |
200,911 | 140,281 | 676,552 | 505,414 | ||||||||||||
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| Income from operations |
155,304 | 78,841 | 630,014 | 247,682 | ||||||||||||
| Interest expense, net |
223 | 383 | 1,524 | 1,495 | ||||||||||||
| Foreign currency loss (gain) |
526 | 1,291 | 1,363 | (2,629 | ) | |||||||||||
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| Income before provision for income taxes |
154,555 | 77,167 | 627,127 | 248,816 | ||||||||||||
| Provision for income taxes |
53,454 | 33,555 | 229,525 | 101,452 | ||||||||||||
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| Net income |
101,101 | 43,612 | 397,602 | 147,364 | ||||||||||||
| Net income applicable to preference shareholders |
— | — | — | 21,227 | ||||||||||||
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| Net income available for ordinary shareholders |
$ | 101,101 | $ | 43,612 | $ | 397,602 | $ | 126,137 | ||||||||
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| Weighted average ordinary shares outstanding: |
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| Basic |
200,080,126 | 191,184,171 | 196,615,054 | 158,258,126 | ||||||||||||
| Diluted |
203,785,123 | 196,855,404 | 201,540,144 | 189,299,197 | ||||||||||||
| Net income per ordinary share (1) : |
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| Basic |
$ | 0.51 | $ | 0.23 | $ | 2.02 | $ | 0.80 | ||||||||
| Diluted |
$ | 0.50 | $ | 0.22 | $ | 1.97 | $ | 0.78 | ||||||||
| Statements of Comprehensive Income: |
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| Net income |
$ | 101,101 | $ | 43,612 | $ | 397,602 | $ | 147,364 | ||||||||
| Foreign currency translation adjustments |
(5,663 | ) | 2,231 | (4,006 | ) | (4,768 | ) | |||||||||
| Net realized and unrealized gains on derivatives |
1,647 | — | 1,280 | — | ||||||||||||
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| Comprehensive Income |
$ | 97,085 | $ | 45,843 | $ | 394,876 | $ | 142,596 | ||||||||
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| (1) | The calculation for basic earnings per ordinary share is based on net income available for ordinary shareholders divided by basic ordinary shares. The calculation for diluted earnings per share is based on net income divided by diluted shares. |
MICHAEL KORS
SCHEDULE 2
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| March 30, 2013 |
March 31, 2012 |
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| Assets | ||||||||
| Current assets |
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| Cash and cash equivalents |
$ | 472,511 | $ | 106,354 | ||||
| Receivables, net |
206,454 | 127,226 | ||||||
| Inventories |
266,894 | 187,413 | ||||||
| Deferred tax assets |
8,480 | 11,145 | ||||||
| Prepaid expenses and other current assets |
34,850 | 31,925 | ||||||
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| Total current assets |
989,189 | 464,063 | ||||||
| Property and equipment, net |
242,113 | 170,755 | ||||||
| Intangible assets, net |
20,980 | 14,146 | ||||||
| Goodwill |
14,005 | 14,005 | ||||||
| Deferred tax assets |
4,389 | 3,952 | ||||||
| Other assets |
18,889 | 7,504 | ||||||
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| Total assets |
$ | 1,289,565 | $ | 674,425 | ||||
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| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities |
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| Revolving line of credit |
$ | — | $ | 22,674 | ||||
| Accounts payable |
82,977 | 67,326 | ||||||
| Accrued payroll and payroll related expenses |
38,642 | 33,710 | ||||||
| Accrued income taxes |
9,074 | 8,199 | ||||||
| Accrued expenses and other current liabilities |
33,555 | 33,097 | ||||||
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| Total current liabilities |
164,248 | 165,006 | ||||||
| Deferred rent |
56,986 | 43,292 | ||||||
| Deferred tax liabilities |
13,163 | 6,300 | ||||||
| Other long-term liabilities |
7,922 | 3,590 | ||||||
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| Total liabilities |
242,319 | 218,188 | ||||||
| Commitments and contingencies |
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| Shareholders’ equity |
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| Ordinary shares, no par value; 650,000,000 shares authorized, and 201,454,408 shares issued and outstanding at March 30, 2013 and 192,731,390 shares issued and outstanding at March 31, 2012 |
— | — | ||||||
| Additional paid-in capital |
424,454 | 228,321 | ||||||
| Accumulated other comprehensive loss |
(3,461 | ) | (735 | ) | ||||
| Retained earnings |
626,253 | 228,651 | ||||||
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| Total shareholders’ equity |
1,047,246 | 456,237 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 1,289,565 | $ | 674,425 | ||||
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MICHAEL KORS
SCHEDULE 3
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION FOR NON-GAAP MEASURES– CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
(Unaudited)
Reconciliation of income from operations, as reported, to income from operations, as adjusted
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
| March 30, 2013 |
March 31, 2012 |
March 30, 2013 |
March 31, 2012 |
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| Income from operations, as reported |
$ | 155,304 | $ | 78,841 | $ | 630,014 | $ | 247,682 | ||||||||
| Add back adjustments for one time charges: |
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| Stock option expense |
— | — | — | 10,600 | ||||||||||||
| IPO fees |
— | (2,000 | ) | — | 3,170 | |||||||||||
| Employee share option redemption - private placement |
— | — | — | 10,690 | ||||||||||||
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| Income from operations, as adjusted |
$ | 155,304 | $ | 76,841 | $ | 630,014 | $ | 272,142 | ||||||||
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| Reconciliation of net income, as reported, to net income, as adjusted | ||||||||||||||||
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
| March 30, 2013 |
March 31, 2012 |
March 30, 2013 |
March 31, 2012 |
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| Net income, as reported |
$ | 101,101 | $ | 43,612 | $ | 397,602 | $ | 147,364 | ||||||||
| Add back adjustments for one time charges: |
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| Stock option expense |
— | — | — | 10,600 | ||||||||||||
| IPO fees |
— | (2,000 | ) | — | 3,170 | |||||||||||
| Employee share option redemption - private placement |
— | — | — | 10,690 | ||||||||||||
| Less tax benefit on above |
— | — | — | (8,686 | ) | |||||||||||
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| Net income, as adjusted |
$ | 101,101 | $ | 41,612 | $ | 397,602 | $ | 163,138 | ||||||||
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| Weighted average ordinary shares outstanding: |
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| Diluted |
203,785,123 | 196,855,404 | 201,540,144 | 189,299,197 | ||||||||||||
| Net income per ordinary share, as adjusted: |
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| Diluted |
$ | 0.50 | $ | 0.21 | $ | 1.97 | $ | 0.86 | ||||||||
Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP operating results that exclude certain charges or credits such as transaction expenses related to the Company’s IPO, Stock option expense and other offering fees. These amounts are not in accordance with, or an alternative to, GAAP. The Company’s management believes that these measures provide investors with transparency by helping illustrate the underlying financial and business trends relating to the Company’s results of operations and financial condition and comparability between current and prior periods. Management uses the measures to establish and monitor budgets and operational goals and to evaluate the performance of the Company.
MICHAEL KORS
SCHEDULE 4
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT DATA
(In thousands)
(Unaudited)
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
| March 30, 2013 |
March 31, 2012 |
March 30, 2013 |
March 31, 2012 |
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| Revenue by Region: |
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| North America (U.S. and Canada) |
$ | 516,947 | $ | 339,332 | $ | 1,938,635 | $ | 1,183,234 | ||||||||
| Europe |
73,082 | 37,025 | 220,724 | 108,790 | ||||||||||||
| Other Regions |
7,125 | 3,633 | 22,373 | 10,230 | ||||||||||||
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| Total Revenue: |
$ | 597,154 | $ | 379,990 | $ | 2,181,732 | $ | 1,302,254 | ||||||||
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| Revenue by Segment: |
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| Net sales: Retail |
$ | 272,717 | $ | 171,789 | $ | 1,062,642 | $ | 626,940 | ||||||||
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Wholesale |
304,662 | 191,116 | 1,032,115 | 610,160 | ||||||||||||
| Licensing |
19,775 | 17,085 | 86,975 | 65,154 | ||||||||||||
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| Total Revenue: |
$ | 597,154 | $ | 379,990 | $ | 2,181,732 | $ | 1,302,254 | ||||||||
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| Income from Operations: |
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| Retail |
$ | 78,327 | $ | 33,593 | $ | 315,654 | $ | 121,851 | ||||||||
| Wholesale |
74,416 | 34,843 | 269,323 | 85,000 | ||||||||||||
| Licensing |
2,561 | 10,405 | 45,037 | 40,831 | ||||||||||||
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| Total Income from Operations |
$ | 155,304 | $ | 78,841 | $ | 630,014 | $ | 247,682 | ||||||||
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| Income from Operations, as adjusted*: |
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| Retail |
$ | 78,327 | $ | 32,739 | $ | 315,654 | $ | 129,230 | ||||||||
| Wholesale |
74,416 | 33,814 | 269,323 | 100,759 | ||||||||||||
| Licensing |
2,561 | 10,288 | 45,037 | 42,153 | ||||||||||||
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| Total Income from Operations, as adjusted |
$ | 155,304 | $ | 76,841 | $ | 630,014 | $ | 272,142 | ||||||||
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| * | Adjusted results reflect one-time items shown in Schedule 3. |