LONDON (AP) — Sales at Michael Kors surged during the holidays despite the company cutting back on discounts, pushing third-quarter profits well past most expectations.
The results released Wednesday offered encouraging news for the brand, which is trying to reinvigorate itself by reducing discounts and its distribution to department stores. Kors, the seller of luxury handbags, clothing and accessories, had been hurt by overexpansion.
Like many high-end retailers, Kors is trying to overhaul its business as affluent shoppers shift many of their purchases online, where there's an abundance of luxury goods at lower prices. Last week, Ralph Lauren Corp. said sales declined as it cut down on shipments and offered fewer discounters. And Tapestry, which includes Coach, had strong sales growth as it sees rebounding business in Coach accessories.
For the three months ended Dec. 30, Kors earned $219.4 million, or $1.42 per share. The London-based company earned $271.6 million, or $1.64 per share, a year earlier.
Adjusted for one-time costs and restructuring expenses, earnings came to $1.77 per share, far beyond projections of $1.29 from industry analysts, according to a poll done by Zacks Investment Research.
Revenue, which also handily topped Wall Street expectations, increased 6.6 percent to $1.44 billion from $1.35 billion, bolstered by surprisingly strong sales of Jimmy Choo and Kors goods.
Sales at stores open at least a year fell 3.2 percent but that was less than analysts had expected.
For the quarter ending in March, Michael Kors Holdings Ltd. foresees revenue of $1.11 billion to $1.13 billion. Analysts polled by Zacks predict $1.13 billion.
The retailer anticipates fiscal 2018 earnings of $4.40 to $4.45 per share on revenue of about $4.66 billion. Analysts surveyed by FactSet expect earnings of $4 per share on revenue of $4.62 billion.
Kors' shares rose more than 3 percent, or $2.33 to $67.77 in Wednesday trading.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on KORS at https://www.zacks.com/ap/KORS