Saturday, February 27, 2021

Michael Kors records “disappointing” quarter

Michael Kors recorded a drop in sales in its latest trading quarter and confirmed plans to cut back promotions in North America to boost average retail prices.

The luxury accessories and fashion retailer said average selling prices in its third quarter ending December 31 – which including the crucial Christmas trading period – were hurt by a highly promotional environment as well as the popularity of cheaper cross-body bags and small leather goods.

Like its rival Coach, Kors is now reducing supplies to department stores which have been heavily discounting its products in the wake of low footfall traffic.

READ MORE: Michael Kors to debut standalone menswear shop in London

Kors‘ quarterly revenue in the Americas region went down by 7.4 per cent, while Europe (including the UK) sales dropped seven per cent.

Meanwhile, sales at stores open for more than a year decreased by 6.9 per cent in the third quarter, well below analysts‘ forecast of a 4.9 per cent decline.

Net income attributable to the company fell to $271.3 million (£218.88 million) in the same quarter, down from $294.6 million (£237.68 million) in the similar period a year earlier.

READ MORE: Michael Kors beats predictions but faces uncertain future

Kors‘ company-wide revenue also dipped 3.2 per cent to $1.35 billion (£1.08 billion).

“Overall, we were disappointed with our North American and European comparable store sales performance during the quarter,” Michael Kors chief executive John Idol stated in a press release.

“We believe that headwinds in these markets will continue throughout the spring season as we face reduced traffic trends in shopping malls, currency fluctuation, uncertainty surrounding certain political changes in European countries and the implementation of our reduced promotional cadence in North America.”

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