Luxury lifestyle retailer Michael Kors has reported its slowest quarterly growth in North America since it listed in 2011.
- Michael Kors reports first slowdown in revenue growth since going public
- Like-for-like store sales fell 5.8%
- Analysts suggest shoppers are experiencing brand fatigue following rapid expansion
The retailer reported a fall in like-for-like store sales and slow revenue growth in its fourth-quarter ending March 28.
Like-for-like store sales fell 5.8% over the quarter, while total North American revenue increased 14.3% on a constant currency basis. But total company revenue growth increased by 17.8% to $1.1bn (£720m) – the slowest growth reported since 2011.
Meanwhile retail net sales increased 14.9% to $469.4m (£309m),driven by the opening of 121 new stores over the last financial year. That brought the total number of Michael Kors stores to 526 (343 in North America, 133 in Europe and 50 in Japan).
Michael Kors has been one of the market’s fastest-growing brands in recent years, but analysts told Reuters that its heavy expansion plans may have led to brand fatigue among shoppers.
The retailer’s fourth-quarter gross profits increased 14.8% to $630.8m (£415m), while full-year profits hit $2.6bn (£1.7bn) - an increase of 31.3%. Total revenue for the year increased 32% to $4.4bn (£2.9bn). On a constant currency basis retail net sales increased 36.7% and yearly like for like sales increased 11.9%.
Michael Kors chairman and chief executive John D. Idol said: “Fiscal 2015 marked another year of sales and earnings growth in excess of 30%. While we were faced with a number of headwinds in the fourth quarter, we were pleased with the strong performance across our segments and geographies.”
Looking towards its next financial year, Idol said it would be a period of strategic investments with growth opportunities coming from international expansion and ‘digital ecommerce flagships’.
“In addition, we plan to capitalise on wearable technology in watches and other categories, as innovation and demand in this area continue to advance.”