Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Coach, Inc. (COH), G-III Apparel Group, Ltd. (GIII): Why Michael Kors Holdings Ltd (KORS) Is Still a Good Investment

Page 1 of 2

Michael Kors Holdings Ltd (NYSE:KORS) is a lifestyle brand for “aspiring jet-setters” and a growing luxury apparel & accessories wholesale and retail company. It continues to attract customers across the globe. The company’s product portfolio is diverse, as no single segment generates more than 30% of its revenue.

Michael Kors Holdings Ltd (NYSE:KORS) has done really well lately, and its stock has appreciated more than 40% as compared to the S&P 500’s gain of 18% year-to-date.

^SPX Chart

^SPX data by YCharts

Opportunity ahead

The worldwide luxury goods market continues to see double-digit annual growth and is currently valued at over $260 billion, according to Bain & Company. It is estimated that the worldwide luxury goods market will grow about 50% faster than the GDP, with 4% to 5% average annual growth through 2015.

Michael Kors Holdings Ltd (NYSE:KORS) is a renowned player in the luxury apparel & accessories and footwear space, and it has done well to ride the industry trends. Its same-stores-sales improved 27% in the previous quarter, and revenue was $640.9 million. This was 54.5% more than the same quarter a year ago and it exceeded Street expectations of $572 million. Gross profit jumped 58.3% to $397.3 million and the company recorded earnings of $0.61 per share, beating consensus estimates by 24.5%.

Michael Kors Holdings Ltd (NYSE:KORS) opened 75 new stores and operated 114 additional retail stores through licensing partners in order to attract more shoppers. Globally, the company operated 442 stores at the end of the first quarter of fiscal 2014.

A look at competition

China’s clothing industry is set to become the world’s second largest by 2020 and will account for approximately 30% of the global fashion market’s growth over the next five years. The Chinese apparel market is estimated to grow at a CAGR of 7% through 2016. But in China, Michael Kors Holdings Ltd (NYSE:KORS)’ rival Coach, Inc. (NYSE:COH) has a bigger presence. Kors is planning to expand in China in order to compete effectively against Coach.

Kors plans to open 100-125 stores in China in the next few years as it looks to catch Coach, Inc. (NYSE:COH), which has more than a 100 stores currently. Kors’ online strategy also seems to be paying off, as it was the most sought-after American brand in China according to the Digital Luxury Group.

On the other hand, Coach, Inc. (NYSE:COH) registered an increase of 10% in its international business in the previous quarter, with sales in China jumping 35%,  including a double-digit increase in comparable-store sales. Globally, Coach is looking to increase its retail square footage by 9% in 2013. Going forward, the company is very optimistic about its unisex Legacy lifestyle collection, men’s-only stores, and international growth opportunities as macroeconomic conditions improve.

G-III Apparel Group, Ltd. (NASDAQ:GIII) is another Kors competitor. It has a strong portfolio of 30 licensed brands, marketing apparel, outerwear, beachwear, luggage, women’s handbags, small leather goods and accessories, to name a few items. The company sells its offerings of apparel under popular brand names like Andrew Marc, Jessica Howard, Calvin Klein, Levi’s, Tommy Hilfiger and more.

G-III Apparel Group, Ltd. (NASDAQ:GIII) recently announced that it would be joining hands with MLB to revive the Starter Statin jacket franchise. G-III is also looking at acquisitions and mergers as a route to diversify for the future.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!