Michael Kors's Business Is Still Growing, But More Slowly

The brand's stock price took a tumble on Thursday morning after reporting a dim outlook.
Avatar:
Eliza Brooke
Author:
Publish date:
Social count:
562
The brand's stock price took a tumble on Thursday morning after reporting a dim outlook.
Kors takes a bow. Photo: Dimitrios Kambouris/Getty Images

Kors takes a bow. Photo: Dimitrios Kambouris/Getty Images

Widely acknowledged as one of American fashion's most successful modern moneymakers, Michael Kors seems to be losing a little steam

The brand reported Thursday that it brought in $1.3 billion in the three months ending Dec. 27, an increase of 29.9 percent relative to the same period in 2013 — that's impressive growth, but slow relative to revenue rises of 42.7 and 43.4 percent in the two preceding quarters. The company's CEO did caution that holiday sales would be slower this season, because it didn't want to steeply discount its goods to compete with other, more panicked retailers.

Sales at stores that have been open for the full year followed a similar pattern, gaining 8.6 percent in the third quarter compared to 16.4 and 24.2 percent in the second and first quarters. 

Tl;dr — the business is still growing, but it's growing at a progressively slower rate.

Here's what's got investors troubled: Kors is expecting that it will only bring in between $1.05 and $1.08 billion in the final quarter of the year. The company's share price dropped 5.4 percent on Thursday morning, recovering about 2 percent by 10 a.m.

The designer's New York Fashion Week runway show takes place in less than two weeks. With the pressure on, we'll see if he has something spectacularly covetable cooked up for fall 2015.