Michael Kors Holdings Limited Announces Second Quarter Fiscal 2019 Results
Second Quarter Results Exceed Expectations
Jimmy Choo Results Better than Anticipated
Raises Full Year Adjusted Earnings per Share Outlook to $4.95 to $5.05 from $4.90 to $5.00
Michael Kors Holdings Limited (NYSE:KORS), a global fashion luxury group, today announced its financial results for the fiscal
2019 second quarter ended September 29, 2018.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181107005295/en/
MICHAEL KORS (Photo: Business Wire)
Second Quarter Fiscal 2019 Highlights
- Delivered better than anticipated gross margin, operating margin and earnings per share
- Revenues and comparable store sales in line with expectations
- Michael Kors brand revenues were down 0.8%, in line with expectations
- Comparable store sales were down low single digits, in line with expectations
- Wholesale revenues exceeded expectations, reflecting strength in the Americas
- Jimmy Choo delivered better than anticipated revenues driven by strength in footwear
John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “We are pleased to report results that have again
exceeded our expectations, and are raising our fiscal 2019 EPS guidance to a range of $4.95 to $5.05, reflecting double digit
earnings growth for the year. As we enter the second half of fiscal 2019 we look forward to welcoming Versace into our group. With
the acquisition of Versace we have built one of the world's leading fashion luxury groups in just one year, setting the stage for
accelerated revenue and earnings growth. This is a truly remarkable and historic moment for our company and we look forward to
completing this transformational acquisition in the coming months.”
Second Quarter Fiscal 2019 Results
Financial Results and non-GAAP Reconciliation
The Company’s results are reported in this press release in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP”) and on an adjusted, non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information is
provided at the end of this press release.
Overview of MKHL Second Quarter Fiscal 2019 Results:
- Total revenue increased 9.3% to $1.25 billion, including a $116.7 million contribution from Jimmy
Choo.
- Gross profit was $763.1 million and gross margin was 60.9%, compared to $690.8 million and 60.2% in
the prior year. Adjusted gross profit was $765.4 million and adjusted gross margin was 61.0%, compared to $690.8 million and
60.2% in the prior year.
- Income from operations was $189.4 million and operating margin was 15.1% compared to $199.1 million
and 17.4% in the prior year. Adjusted income from operations was $216.9 million and operating margin was 17.3%, compared to
$237.4 million and 20.7% in the prior year.
- Net income was $137.6 million, or $0.91 per diluted share compared to $202.9 million, or $1.32 per
diluted share in the prior year. Adjusted net income was $192.5 million, or $1.27 per diluted share, compared to $204.5 million,
or $1.33 per diluted share, in the prior year.
Michael Kors Segments Second Quarter Fiscal 2019 Results:
- Michael Kors Retail revenue of $643.9 million was approximately flat compared to the prior year.
Comparable store sales decreased 2.1%, which was in line with expectations. On a constant currency basis, comparable store sales
decreased 1.3%.
- Michael Kors Retail operating income was $67.9 million and operating margin was 10.5%, compared to
$69.0 million and 10.7% in the prior year. Adjusted operating income was $79.6 million while adjusted operating margin was 12.4%,
compared to $99.2 million and 15.4% in the prior year.
- Michael Kors Wholesale revenue declined 1.3% to $457.8 million compared to the prior year.
- Michael Kors Wholesale operating income was $130.1 million and operating margin was 28.4%, compared
to $119.6 million and 25.8% in the prior year. On an adjusted basis operating income was $134.2 million while adjusted operating
margin was 29.3% compared to $126.5 million and 27.3% in the prior year.
- Michael Kors Licensing revenue decreased 6.8% to $35.4 million compared to the prior year.
- Michael Kors Licensing operating income was $9.8 million and operating margin was 27.7%, compared to
$10.5 million and 27.6% in the prior year. On an adjusted basis operating income was $10.5 million and operating margin was
29.7%, compared to $11.7 million and 30.8% in the prior year.
- Inventory for the Michael Kors brand at September 29, 2018 was $619.7 million, an 11% decrease as
compared to the prior year.
Jimmy Choo Second Quarter Fiscal 2019 Results:
- Jimmy Choo revenue was $116.7 million. The company acquired Jimmy Choo on November 1, 2017, and
compared to Jimmy Choo stand-alone results from the prior year, revenue increased double digits.
- Jimmy Choo operating loss was $18.4 million and adjusted operating loss was $7.4 million.
Outlook
The Company is raising full year adjusted earnings per share guidance by $0.05 to $4.95 to $5.05, reflecting better than
expected second quarter performance for both the Michael Kors and Jimmy Choo brands.
For the full year, the Company continues to expect total revenue to be approximately $5.125 billion, including between $580
million and $590 million of incremental Jimmy Choo revenue. Reported comparable store sales for Michael Kors is expected to be down
in the low single digits, primarily driven by an unfavorable currency impact. The Company has raised guidance for operating margin
to approximately 18.2%. Diluted earnings per share are expected to be in the range of $4.95 to $5.05. The Company continues to
expect EPS dilution from Jimmy Choo of $0.05 to flat. Earnings per share guidance assumes approximately 152 million weighted
average diluted shares outstanding and a tax rate of approximately 15.5%.
For the third quarter of fiscal 2019, the Company expects total revenue of approximately $1.46 billion, including approximately
$165 million of incremental revenue from Jimmy Choo. The Company expects third quarter retail revenue for Michael Kors to grow in
the low single digits. Comparable store sales on a reported basis are expected to decline in the low single digits, primarily due
to an unfavorable foreign currency impact. The Company expects wholesale revenue to decrease in the high single digits, and
licensing revenue to decline in the mid-teens. Operating margin is expected to be approximately 20.8%. Diluted earnings per share
are expected to be in the range of $1.52 to $1.57, which includes approximately $0.04 to $0.06 of accretion from Jimmy Choo.
Earnings per share assumes approximately 152 million weighted average diluted shares outstanding and a tax rate of approximately
20%.
Conference Call Information
A conference call to discuss second quarter results is scheduled for today, November 7, 2018 at 8:30 a.m. ET. A live
webcast of the conference call will be available on the Company’s investor relations website,
www.investors.michaelkors.com. In addition, a replay will be available shortly after the conclusion of the call and remain
available until November 15, 2018. To access the telephone replay, listeners should dial 1-844-512-2921 or 1-412-317-6671 for
international callers. The access code for the replay is 5309233. A replay of the webcast will also be available within two hours
of the conclusion of the call and will remain on the website for 90 days.
Use of Non-GAAP Financial Measures
Constant currency effects are non-GAAP financial measures, which are provided to supplement our reported operating results to
facilitate comparisons of our operating results and trends in our business, excluding the effects of foreign currency rate
fluctuations. Because we are a global Company, foreign currency exchange rates may have a significant effect on our reported
results. We calculate constant currency measures and the related foreign currency impacts by translating the current year’s
reported amounts into comparable amounts using prior year’s foreign exchange rates for each currency. All constant currency
performance measures discussed below should be considered a supplement to and not in lieu of our operating performance measures
calculated in accordance with U.S. GAAP. Additionally, this earnings release includes certain non-GAAP financial measures relating
to certain one-time costs associated with the Jimmy Choo acquisition and the agreement to acquire Versace and restructuring and
non-cash impairment charges primarily associated with underperforming retail stores. The Company uses non-GAAP financial measures,
among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and
views its business. The Company believes that excluding non-recurring items helps its management and investors compare operating
performance based on its ongoing operations. While the Company considers the non-GAAP measures to be useful supplemental measures
in analyzing its results, they are not intended to replace, nor act as a substitute for, any amounts presented in its consolidated
financial statements prepared in conformity with U.S. GAAP and may be different from non-GAAP measures reported by other
companies.
About Michael Kors Holdings Limited
Michael Kors Holdings Limited is a global fashion luxury group, consisting of iconic brands that are industry leaders in design,
style and craftsmanship. Its brands cover the full spectrum of fashion luxury categories including women’s and men’s accessories,
footwear and apparel as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products. The Company’s
goal is to continue to extend the global reach of its brands while ensuring that they maintain their independence and exclusive
DNA. Michael Kors Holdings Limited is publicly listed on the New York Stock Exchange under the ticker KORS. As previously
announced, in connection with the closing of the Company’s acquisition of Versace, anticipated to occur in the Company’s fourth
fiscal quarter, the Company will rename itself Capri Holdings Limited (NYSE: CPRI).
Forward Looking Statements
This press release contains statements which are, or may be deemed to be, “forward-looking statements.” Forward-looking
statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of
the management of Michael Kors Holdings Limited (the “Company”) about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially from the future results expressed or implied by the
forward-looking statements. All statements other than statements of historical facts included in this press release may be
forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “targets”,
“plans”, “believes”, “expects”, “aims”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “estimates”,
“synergy”, “cost-saving”, “projects”, “goal”, “strategy”, “budget”, “forecast” or “might” or, words or terms of similar substance
or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following:
(i) the expected effects of the Versace acquisition on the Company, (ii) the expected timing and scope of the Versace acquisition,
(iii) future capital expenditures, expenses, revenues, earnings, economic performance, indebtedness, financial condition, share
buybacks, dividend policy, losses and future prospects; (iv) business and management strategies and the expansion and growth of the
Company’s and Versace’s operations and benefits from the acquisition; and (v) the effects of government regulation on the Company’s
or Versace’s business. These forward-looking statements are not guarantees of future financial performance. Such
forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and
are based on certain key assumptions. Many risks, uncertainties and other factors could cause actual results to differ materially
from those projected or implied in any forward-looking statements. These risks, uncertainties and other factors include the
satisfaction of the conditions to consummating the Versace acquisition, timing of closing of the Versace acquisition, the Company’s
ability to integrate the businesses successfully and to achieve anticipated benefits of the Versace acquisition; the risk of
disruptions to the Company’s or Versace’s businesses; the negative effects of the announcement of the proposed Versace acquisition
or the consummation of the proposed acquisition on the market price of the Company’s ordinary shares and its operating results;
significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed
Versace acquisition; fluctuations in demand for the Company’s and Versace’s products; future levels of indebtedness; future
availability of credit; the timing and scope of future share buybacks, which may be suspended at any time due to market conditions
and the level of other investing activities and uses of cash, including in connection with the pending Versace acquisition; changes
in consumer traffic and retail trends; loss of market share and industry competition; fluctuations in the capital markets;
fluctuations in interest and exchange rates; the occurrence of unforeseen disasters or catastrophes; political or economic
instability in principal markets; adverse outcomes in litigation; and general, local and global economic, political, business and
market conditions, as well as those risks set forth in the reports that the Company files from time to time with the U.S.
Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018
(File No. 001-35368). Other unknown or unpredictable factors could cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Unless
otherwise required by applicable law, the Company does not provide any representation, assurance or guarantee that the occurrence
of the events expressed or implied in any forward-looking statements in this press release will actually occur. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements. All subsequent oral
or written forward-looking statements attributable to the Company are expressly qualified in their entirety by the cautionary
statement above. The Company disclaims any obligation to update or revise any forward-looking or other statements contained herein
other than in accordance with legal and regulatory obligations.
| |
|
SCHEDULE 1
|
| |
|
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)
|
| |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
September 29,
2018
|
|
September 30,
2017
|
|
September 29,
2018
|
|
September 30,
2017
|
| Total revenue |
|
|
$ |
1,253.8 |
|
|
$ |
1,146.6 |
|
|
$ |
2,456.3 |
|
|
$ |
2,099.0 |
|
| Cost of goods sold |
|
|
490.7 |
|
|
455.8 |
|
|
942.4 |
|
|
833.5 |
|
| Gross profit |
|
|
763.1 |
|
|
690.8 |
|
|
1,513.9 |
|
|
1,265.5 |
|
| Total operating expenses |
|
|
573.7 |
|
|
491.7 |
|
|
1,109.3 |
|
|
917.0 |
|
| Income from operations |
|
|
189.4 |
|
|
199.1 |
|
|
404.6 |
|
|
348.5 |
|
| Other income, net |
|
|
(1.5 |
) |
|
(0.3 |
) |
|
(2.3 |
) |
|
(0.9 |
) |
| Interest expense, net |
|
|
5.9 |
|
|
0.8 |
|
|
13.4 |
|
|
1.9 |
|
| Foreign currency loss (gain) |
|
|
33.0 |
|
|
(40.5 |
) |
|
35.9 |
|
|
(41.7 |
) |
| Income before provision for income taxes |
|
|
152.0 |
|
|
239.1 |
|
|
357.6 |
|
|
389.2 |
|
| Provision for income taxes |
|
|
14.9 |
|
|
36.4 |
|
|
34.3 |
|
|
61.0 |
|
| Net income |
|
|
137.1 |
|
|
202.7 |
|
|
323.3 |
|
|
328.2 |
|
| Less: Net loss attributable to noncontrolling interests |
|
|
(0.5 |
) |
|
(0.2 |
) |
|
(0.7 |
) |
|
(0.2 |
) |
| Net income attributable to MKHL |
|
|
$ |
137.6 |
|
|
$ |
202.9 |
|
|
$ |
324.0 |
|
|
$ |
328.4 |
|
| Weighted average ordinary shares outstanding: |
|
|
|
|
|
|
|
|
|
| Basic |
|
|
149,575,112 |
|
|
151,781,340 |
|
|
149,538,607 |
|
|
153,134,119 |
|
| Diluted |
|
|
151,705,685 |
|
|
154,168,094 |
|
|
152,052,671 |
|
|
155,519,806 |
|
| Net income per ordinary share: |
|
|
|
|
|
|
|
|
|
| Basic |
|
|
$ |
0.92 |
|
|
$ |
1.34 |
|
|
$ |
2.17 |
|
|
$ |
2.14 |
|
| Diluted |
|
|
$ |
0.91 |
|
|
$ |
1.32 |
|
|
$ |
2.13 |
|
|
$ |
2.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
SCHEDULE 2
|
| |
|
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
|
| |
|
|
September 29,
2018
|
|
March 31,
2018
|
|
September 30,
2017
|
| Assets |
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
155.2 |
|
|
$ |
163.1 |
|
|
$ |
178.2 |
|
| Receivables, net |
|
339.9 |
|
|
290.5 |
|
|
274.5 |
|
| Inventories |
|
767.6 |
|
|
660.7 |
|
|
696.5 |
|
| Prepaid expenses and other current assets |
|
211.4 |
|
|
147.8 |
|
|
181.5 |
|
| Total current assets |
|
1,474.1 |
|
|
1,262.1 |
|
|
1,330.7 |
|
| Property and equipment, net |
|
552.0 |
|
|
583.2 |
|
|
562.7 |
|
| Intangible assets, net |
|
1,158.6 |
|
|
1,235.7 |
|
|
405.7 |
|
| Goodwill |
|
796.9 |
|
|
847.7 |
|
|
119.7 |
|
| Deferred tax assets |
|
47.1 |
|
|
56.2 |
|
|
69.2 |
|
| Other assets |
|
78.6 |
|
|
74.1 |
|
|
43.7 |
|
| Total assets |
|
$ |
4,107.3 |
|
|
$ |
4,059.0 |
|
|
$ |
2,531.7 |
|
| Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
| Accounts payable |
|
$ |
290.5 |
|
|
$ |
294.1 |
|
|
$ |
174.0 |
|
| Accrued payroll and payroll related expenses |
|
82.7 |
|
|
93.0 |
|
|
51.9 |
|
| Accrued income taxes |
|
23.9 |
|
|
77.6 |
|
|
60.1 |
|
| Short-term debt |
|
255.0 |
|
|
200.0 |
|
|
— |
|
| Accrued expenses and other current liabilities |
|
345.8 |
|
|
295.6 |
|
|
188.7 |
|
| Total current liabilities |
|
997.9 |
|
|
960.3 |
|
|
474.7 |
|
| Deferred rent |
|
133.5 |
|
|
128.4 |
|
|
131.7 |
|
| Deferred tax liabilities |
|
181.5 |
|
|
186.3 |
|
|
78.7 |
|
| Long-term debt |
|
504.6 |
|
|
674.4 |
|
|
— |
|
| Other long-term liabilities |
|
106.5 |
|
|
88.1 |
|
|
41.4 |
|
| Total liabilities |
|
1,924.0 |
|
|
2,037.5 |
|
|
726.5 |
|
| Commitments and contingencies |
|
|
|
|
|
|
| Shareholders’ equity |
|
|
|
|
|
|
| Ordinary shares, no par value; 650,000,000 shares authorized; 213,208,924 shares
issued and 150,150,297 outstanding at September 29, 2018; 210,991,091 shares issued and 149,698,407 outstanding at March 31,
2018, and 210,200,479 shares issued and 152,066,668 outstanding at September 30, 2017 |
|
— |
|
|
— |
|
|
— |
|
| Treasury shares, at cost (63,058,627 shares at September 29, 2018; 61,292,684 shares
at March 31, 2018; and 58,133,811 shares at September 30, 2017) |
|
(3,123.0 |
) |
|
(3,015.9 |
) |
|
(2,815.8 |
) |
| Additional paid-in capital |
|
877.9 |
|
|
831.1 |
|
|
791.9 |
|
| Accumulated other comprehensive (loss) income |
|
(62.9 |
) |
|
50.5 |
|
|
(59.6 |
) |
| Retained earnings |
|
4,487.7 |
|
|
4,152.0 |
|
|
3,888.5 |
|
| Total shareholders’ equity of MKHL |
|
2,179.7 |
|
|
2,017.7 |
|
|
1,805.0 |
|
| Noncontrolling interest |
|
3.6 |
|
|
3.8 |
|
|
0.2 |
|
| Total shareholders’ equity |
|
2,183.3 |
|
|
2,021.5 |
|
|
1,805.2 |
|
| Total liabilities and shareholders’ equity |
|
$ |
4,107.3 |
|
|
$ |
4,059.0 |
|
|
$ |
2,531.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
SCHEDULE 3
|
| |
|
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT DATA
($ in millions)
(Unaudited)
|
| |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
September 29,
2018
|
|
September 30,
2017
|
|
September 29,
2018
|
|
September 30,
2017
|
| Revenue by Segment and Region: |
|
|
|
|
|
|
|
|
| MK Retail |
|
|
The Americas |
|
$ |
394.9 |
|
|
$ |
385.5 |
|
|
$ |
797.1 |
|
|
$ |
777.6 |
|
|
|
|
Europe |
|
|
139.2 |
|
|
|
154.2 |
|
|
|
258.7 |
|
|
|
276.3 |
|
|
|
|
Asia |
|
|
109.8 |
|
|
|
105.3 |
|
|
|
227.6 |
|
|
|
211.0 |
|
| MK Retail Revenue |
|
|
643.9 |
|
|
|
645.0 |
|
|
|
1,283.4 |
|
|
|
1,264.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| MK Wholesale |
|
|
The Americas |
|
|
354.3 |
|
|
|
340.4 |
|
|
|
629.4 |
|
|
|
567.6 |
|
|
|
|
EMEA |
|
|
80.9 |
|
|
|
104.5 |
|
|
|
149.3 |
|
|
|
169.5 |
|
|
|
|
Asia |
|
|
22.6 |
|
|
|
18.7 |
|
|
|
41.9 |
|
|
|
30.1 |
|
| MK Wholesale Revenue |
|
|
457.8 |
|
|
|
463.6 |
|
|
|
820.6 |
|
|
|
767.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| MK Licensing |
|
|
The Americas |
|
|
23.1 |
|
|
|
26.0 |
|
|
|
38.4 |
|
|
|
40.8 |
|
|
|
|
EMEA |
|
|
12.3 |
|
|
|
12.0 |
|
|
|
24.5 |
|
|
|
26.1 |
|
| MK Licensing Revenue |
|
|
35.4 |
|
|
|
38.0 |
|
|
|
62.9 |
|
|
|
66.9 |
|
|
|
|
|
|
|
|
|
|
| Michael Kors Revenue |
|
|
1,137.1 |
|
|
|
1,146.6 |
|
|
|
2,166.9 |
|
|
|
2,099.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Jimmy Choo |
|
|
The Americas |
|
|
20.4 |
|
|
|
— |
|
|
|
46.0 |
|
|
|
— |
|
|
|
|
EMEA |
|
|
56.8 |
|
|
|
— |
|
|
|
158.5 |
|
|
|
— |
|
|
|
|
Asia |
|
|
39.5 |
|
|
|
— |
|
|
|
84.9 |
|
|
|
— |
|
| Jimmy Choo Revenue |
|
|
116.7 |
|
|
|
— |
|
|
|
289.4 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
| Total Revenue |
|
$ |
1,253.8 |
|
|
$ |
1,146.6 |
|
|
$ |
2,456.3 |
|
|
$ |
2,099.0 |
|
|
|
|
|
|
|
|
|
|
| Income from Operations: |
|
|
|
|
|
|
|
|
| MK Retail |
|
|
|
|
$ |
67.9 |
|
|
$ |
69.0 |
|
|
$ |
160.4 |
|
|
$ |
161.2 |
|
| MK Wholesale |
|
|
|
|
|
130.1 |
|
|
|
119.6 |
|
|
|
227.6 |
|
|
|
163.1 |
|
| MK Licensing |
|
|
|
|
|
9.8 |
|
|
|
10.5 |
|
|
|
18.9 |
|
|
|
24.2 |
|
| Michael Kors |
|
|
|
|
|
207.8 |
|
|
|
199.1 |
|
|
|
406.9 |
|
|
|
348.5 |
|
| Jimmy Choo |
|
|
|
|
|
(18.4 |
) |
|
|
— |
|
|
|
(2.3 |
) |
|
|
— |
|
| Total Income from Operations |
|
$ |
189.4 |
|
|
$ |
199.1 |
|
|
$ |
404.6 |
|
|
$ |
348.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Margin: |
|
|
|
|
|
|
|
|
|
|
|
| MK Retail |
|
|
|
|
|
10.5 |
% |
|
|
10.7 |
% |
|
|
12.5 |
% |
|
|
12.7 |
% |
| MK Wholesale |
|
|
|
|
|
28.4 |
% |
|
|
25.8 |
% |
|
|
27.7 |
% |
|
|
21.3 |
% |
| MK Licensing |
|
|
|
|
|
27.7 |
% |
|
|
27.6 |
% |
|
|
30.0 |
% |
|
|
36.2 |
% |
| Michael Kors |
|
|
|
|
|
18.3 |
% |
|
|
17.4 |
% |
|
|
18.8 |
% |
|
|
16.6 |
% |
| Jimmy Choo |
|
|
|
|
|
(15.8 |
)% |
|
|
— |
% |
|
|
(0.8 |
)% |
|
|
— |
% |
| Total Operating Margin |
|
|
|
|
|
15.1 |
% |
|
|
17.4 |
% |
|
|
16.5 |
% |
|
|
16.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
SCHEDULE 4
|
| |
|
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
SUPPLEMENTAL RETAIL STORE INFORMATION
(Unaudited)
|
| |
|
|
|
|
|
|
|
September 29, 2018 |
| Retail Store Information: |
|
|
|
|
Store Count |
|
Square Footage |
| The Americas |
|
|
|
|
398 |
|
|
1,365,108 |
| Europe |
|
|
|
|
195 |
|
|
535,103 |
| Asia |
|
|
|
|
261 |
|
|
560,401 |
| Michael Kors |
|
|
|
|
854 |
|
|
2,460,612 |
| Jimmy Choo |
|
|
|
|
204 |
|
|
268,251 |
| Total MKHL |
|
|
|
|
|
|
1,058 |
|
|
2,728,863 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
SCHEDULE 5
|
| |
|
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSTANT CURRENCY DATA
(In millions)
(Unaudited)
|
| |
|
|
|
Three Months Ended |
|
% Change |
|
|
|
|
September 29,
2018
|
|
September 30,
2017
|
|
As
Reported
|
|
Constant
Currency
|
| Total revenue: |
|
|
|
|
|
|
|
|
|
| MK Retail |
|
|
$ |
643.9 |
|
$ |
645.0 |
|
(0.2 |
)% |
|
0.5 |
% |
| MK Wholesale |
|
|
|
457.8 |
|
|
463.6 |
|
(1.3 |
)% |
|
(0.9 |
)% |
| MK Licensing |
|
|
|
35.4 |
|
|
38.0 |
|
(6.8 |
)% |
|
(6.8 |
)% |
| Michael Kors |
|
|
|
1,137.1 |
|
|
1,146.6 |
|
(0.8 |
)% |
|
(0.3 |
)% |
| Jimmy Choo |
|
|
|
116.7 |
|
|
— |
|
NM |
|
|
NM |
|
| Total revenue |
|
|
$ |
1,253.8 |
|
$ |
1,146.6 |
|
9.3 |
% |
|
9.9 |
% |
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
% Change |
|
|
|
|
September 29,
2018
|
|
September 30,
2017
|
|
As
Reported
|
|
Constant
Currency
|
| Total revenue: |
|
|
|
|
|
|
|
|
|
| MK Retail |
|
|
$ |
1,283.4 |
|
$ |
1,264.9 |
|
1.5 |
% |
|
0.6 |
% |
| MK Wholesale |
|
|
|
820.6 |
|
|
767.2 |
|
7.0 |
% |
|
6.5 |
% |
| MK Licensing |
|
|
|
62.9 |
|
|
66.9 |
|
(6.0 |
)% |
|
(6.0 |
)% |
| Michael Kors |
|
|
|
2,166.9 |
|
|
2,099.0 |
|
3.2 |
% |
|
2.6 |
% |
| Jimmy Choo |
|
|
|
289.4 |
|
|
— |
|
NM |
|
|
NM |
|
| Total revenue |
|
|
$ |
2,456.3 |
|
$ |
2,099.0 |
|
17.0 |
% |
|
16.4 |
% |
|
|
|
|
|
|
|
|
|
|
| |
|
SCHEDULE 6
|
| |
|
NON-GAAP RECONCILIATIONS OF REPORTED TO ADJUSTED MEASURES,
EXCLUDING LONG-LIVED ASSET IMPAIRMENTS, RESTRUCTURING AND OTHER CHARGES,
INVENTORY STEP-UP RELATED TO JIMMY CHOO ACQUISITION, AND
DERIVATIVE CONTRACT RELATED TO AGREEMENT TO ACQUIRE VERSACE
(In millions, except share and per share data)
(Unaudited)
|
| |
|
|
Three Months Ended September 29, 2018 |
|
|
As Reported |
|
Impairment
Charges
|
|
Restructuring
and Other
Charges(1)
|
|
Inventory
Step-up
Adjustment
|
|
Acquisition
Price
Derivative
Contract
|
|
As Adjusted |
| Jimmy Choo gross profit |
|
$ |
82.4 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2.3 |
|
|
$ |
— |
|
|
$ |
84.7 |
|
| Total gross profit |
|
$ |
763.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2.3 |
|
|
$ |
— |
|
|
$ |
765.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| MK Retail operating income |
|
$ |
67.9 |
|
|
$ |
5.7 |
|
|
$ |
6.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
79.6 |
|
| MK Wholesale operating income |
|
130.1 |
|
|
— |
|
|
4.1 |
|
|
— |
|
|
— |
|
|
134.2 |
|
| MK Licensing operating income |
|
9.8 |
|
|
— |
|
|
0.7 |
|
|
— |
|
|
— |
|
|
10.5 |
|
| Michael Kors operating income |
|
207.8 |
|
|
5.7 |
|
|
10.8 |
|
|
— |
|
|
— |
|
|
224.3 |
|
| Jimmy Choo operating loss |
|
(18.4 |
) |
|
1.3 |
|
|
7.4 |
|
|
2.3 |
|
|
— |
|
|
(7.4 |
) |
| Total income from operations |
|
$ |
189.4 |
|
|
$ |
7.0 |
|
|
$ |
18.2 |
|
|
$ |
2.3 |
|
|
$ |
— |
|
|
$ |
216.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Michael Kors operating expense |
|
$ |
472.9 |
|
|
$ |
(5.7 |
) |
|
$ |
(10.8 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
456.4 |
|
| Jimmy Choo operating expense |
|
100.8 |
|
|
(1.3 |
) |
|
(7.4 |
) |
|
— |
|
|
— |
|
|
92.1 |
|
| Total operating expenses |
|
$ |
573.7 |
|
|
$ |
(7.0 |
) |
|
$ |
(18.2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
548.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency loss |
|
$ |
33.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(30.4 |
) |
|
$ |
2.6 |
|
| Income before provision for income taxes |
|
$ |
152.0 |
|
|
$ |
7.0 |
|
|
$ |
18.2 |
|
|
$ |
2.3 |
|
|
$ |
30.4 |
|
|
$ |
209.9 |
|
| Provision for income taxes |
|
$ |
14.9 |
|
|
$ |
1.0 |
|
|
$ |
1.6 |
|
|
$ |
0.4 |
|
|
$ |
— |
|
|
$ |
17.9 |
|
| Net income attributable to MKHL |
|
$ |
137.6 |
|
|
$ |
6.0 |
|
|
$ |
16.6 |
|
|
$ |
1.9 |
|
|
$ |
30.4 |
|
|
$ |
192.5 |
|
| Diluted net income per ordinary share - MKHL |
|
$ |
0.91 |
|
|
$ |
0.04 |
|
|
$ |
0.11 |
|
|
$ |
0.01 |
|
|
$ |
0.20 |
|
|
$ |
1.27 |
|
| ______________________ |
| (1) |
|
Includes store closure costs recorded in connection with the Retail Fleet
Optimization Plan and other restructuring initiatives, transition costs recorded in connection with the acquisition of Jimmy
Choo Group Limited and transaction and transition costs recorded in connection with the Company’s agreement to acquire Gianni
Versace S.p.A. |
|
|
|
| |
|
SCHEDULE 7
|
| |
|
NON-GAAP RECONCILIATIONS OF REPORTED TO ADJUSTED MEASURES,
EXCLUDING LONG-LIVED ASSET IMPAIRMENTS, RESTRUCTURING AND OTHER CHARGES,
INVENTORY STEP-UP RELATED TO JIMMY CHOO ACQUISITION, AND
DERIVATIVE CONTRACT RELATED TO AGREEMENT TO ACQUIRE VERSACE
(In millions, except share and per share data)
(Unaudited)
|
| |
|
|
Six Months Ended September 29, 2018 |
|
|
As Reported |
|
Impairment
Charges
|
|
Restructuring
and Other
Charges(1)
|
|
Inventory
Step-up
Adjustment
|
|
Acquisition
Price
Derivative
Contract
|
|
As Adjusted |
| Gross profit |
|
$ |
1,513.9 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4.7 |
|
|
$ |
— |
|
|
$ |
1,518.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| MK Retail operating income |
|
$ |
160.4 |
|
|
$ |
10.0 |
|
|
$ |
10.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
181.0 |
| MK Wholesale operating income |
|
227.6 |
|
|
— |
|
|
4.5 |
|
|
— |
|
|
— |
|
|
232.1 |
| MK Licensing operating income |
|
18.9 |
|
|
— |
|
|
0.8 |
|
|
— |
|
|
— |
|
|
19.7 |
| Michael Kors operating income |
|
406.9 |
|
|
10.0 |
|
|
15.9 |
|
|
— |
|
|
— |
|
|
432.8 |
| Jimmy Choo operating (loss) income |
|
(2.3 |
) |
|
1.3 |
|
|
13.6 |
|
|
4.7 |
|
|
— |
|
|
17.3 |
| Total income from operations |
|
$ |
404.6 |
|
|
$ |
11.3 |
|
|
$ |
29.5 |
|
|
$ |
4.7 |
|
|
$ |
— |
|
|
$ |
450.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Michael Kors operating expense |
|
$ |
912.4 |
|
|
$ |
(10.0 |
) |
|
$ |
(15.9 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
886.5 |
| Jimmy Choo operating expense |
|
196.9 |
|
|
(1.3 |
) |
|
(13.6 |
) |
|
— |
|
|
— |
|
|
182.0 |
| Total operating expenses |
|
$ |
1,109.3 |
|
|
$ |
(11.3 |
) |
|
$ |
(29.5 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,068.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency loss |
|
$ |
35.9 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(30.4 |
) |
|
$ |
5.5 |
| Income before provision for income taxes |
|
$ |
357.6 |
|
|
$ |
11.3 |
|
|
$ |
29.5 |
|
|
$ |
4.7 |
|
|
$ |
30.4 |
|
|
$ |
433.5 |
| Provision for income taxes |
|
$ |
34.3 |
|
|
$ |
1.9 |
|
|
$ |
4.0 |
|
|
$ |
0.8 |
|
|
$ |
— |
|
|
$ |
41.0 |
| Net income attributable to MKHL |
|
$ |
324.0 |
|
|
$ |
9.4 |
|
|
$ |
25.5 |
|
|
$ |
3.9 |
|
|
$ |
30.4 |
|
|
$ |
393.2 |
| Diluted net income per ordinary share - MKHL |
|
$ |
2.13 |
|
|
$ |
0.06 |
|
|
$ |
0.17 |
|
|
$ |
0.03 |
|
|
$ |
0.20 |
|
|
$ |
2.59 |
| ______________________ |
| (1) |
|
Includes store closure costs recorded in connection with the Retail Fleet
Optimization Plan and other restructuring initiatives, transition costs recorded in connection with the acquisition of Jimmy
Choo Group Limited and transaction and transition costs recorded in connection with the Company’s agreement to acquire Gianni
Versace S.p.A. |
|
|
|
| |
|
SCHEDULE 8
|
| |
|
NON-GAAP RECONCILIATIONS OF REPORTED TO ADJUSTED MEASURES,
EXCLUDING LONG-LIVED ASSET IMPAIRMENTS,
RESTRUCTURING AND OTHER CHARGES AND DERIVATIVE CONTRACT
RELATED TO ACQUISITION OF JIMMY CHOO
(In millions, except share and per share data)
(Unaudited)
|
| |
|
|
Three Months Ended September 30, 2017 |
|
|
As Reported |
|
Impairment
Charges
|
|
Restructuring
and Other
Charges(1)
|
|
Acquisition
Price
Derivative
Contract
|
|
As Adjusted |
| MK Retail operating income |
|
$ |
69.0 |
|
|
$ |
16.3 |
|
|
$ |
13.9 |
|
|
$ |
— |
|
|
$ |
99.2 |
|
| MK Wholesale operating income |
|
119.6 |
|
|
— |
|
|
6.9 |
|
|
— |
|
|
126.5 |
|
| MK Licensing operating income |
|
10.5 |
|
|
— |
|
|
1.2 |
|
|
— |
|
|
11.7 |
|
| Total income from operations |
|
$ |
199.1 |
|
|
$ |
16.3 |
|
|
$ |
22.0 |
|
|
$ |
— |
|
|
$ |
237.4 |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
$ |
491.7 |
|
|
$ |
(16.3 |
) |
|
$ |
(22.0 |
) |
|
$ |
— |
|
|
$ |
453.4 |
|
| Foreign currency gain |
|
$ |
(40.5 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
36.7 |
|
|
$ |
(3.8 |
) |
| Income before provision for income taxes |
|
$ |
239.1 |
|
|
$ |
16.3 |
|
|
$ |
22.0 |
|
|
$ |
(36.7 |
) |
|
$ |
240.7 |
|
| Provision for income taxes |
|
$ |
36.4 |
|
|
$ |
2.9 |
|
|
$ |
4.1 |
|
|
$ |
(7.0 |
) |
|
$ |
36.4 |
|
| Net income attributable to MKHL |
|
$ |
202.9 |
|
|
$ |
13.4 |
|
|
$ |
17.9 |
|
|
$ |
(29.7 |
) |
|
$ |
204.5 |
|
| Diluted net income per ordinary share - MKHL |
|
$ |
1.32 |
|
|
$ |
0.09 |
|
|
$ |
0.11 |
|
|
$ |
(0.19 |
) |
|
$ |
1.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended September 30, 2017 |
|
|
As Reported |
|
Impairment
Charges
|
|
Restructuring
and Other
Charges(1)
|
|
Acquisition
Price
Derivative
Contract
|
|
As Adjusted |
| MK Retail operating income |
|
$ |
161.2 |
|
|
$ |
16.3 |
|
|
$ |
14.5 |
|
|
$ |
— |
|
|
$ |
192.0 |
|
| Total income from operations |
|
$ |
348.5 |
|
|
$ |
16.3 |
|
|
$ |
23.3 |
|
|
$ |
— |
|
|
$ |
388.1 |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
$ |
917.0 |
|
|
$ |
(16.3 |
) |
|
$ |
(23.3 |
) |
|
$ |
— |
|
|
$ |
877.4 |
|
| Foreign currency gain |
|
$ |
(41.7 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
36.7 |
|
|
$ |
(5.0 |
) |
| Net income attributable to MKHL |
|
$ |
328.4 |
|
|
$ |
13.4 |
|
|
$ |
19.0 |
|
|
$ |
(29.7 |
) |
|
$ |
331.1 |
|
| Diluted net income per ordinary share - MKHL |
|
$ |
2.11 |
|
|
$ |
0.09 |
|
|
$ |
0.12 |
|
|
$ |
(0.19 |
) |
|
$ |
2.13 |
|
| ______________________ |
| (1) |
|
Includes store closure costs recorded in connection with the Retail Fleet
Optimization Plan and transaction costs recorded in connection with the acquisition of Jimmy Choo Group Limited. |
|
|
|
Michael Kors Holdings Limited
Katina Metzidakis, 201-514-8234
InvestorRelations@MichaelKors.com
or
Media:
Michael Kors Holdings Limited
Dinesh Kandiah, 917-934-2427
Press@MichaelKors.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20181107005295/en/