Business Corpus: Michael Kors Is Just Below A Buy Point After Near Breakout On Strong EarningsMichael Kors fiscal Q1 earnings topped estimates, helped by Jimmy Choo and store renovations, and the fashion house raised its 2018 outlook above consensus views. The post Michael Kors Is Just Below A Buy Point After Near Breakout On Strong Earnings appeared first on Investor's Business Daily.

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Michael Kors' (KORS) fiscal first-quarter earnings topped estimates, helped by Jimmy Choo and store renovations, and the fashion house raised its 2018 outlook above consensus views.

Estimates: Wall Street was expecting EPS to soar 17.5% to 94 cents, according to Zacks Investment Research. Revenue was seen climbing 19% to $1.14 billion. Consensus Metrix forecast same-store sales to rise 0.9% overall.

Results: EPS of $1.32 on revenue of $1.20 billion, while same-store sales were flat. Retail revenue rose 3.2% to $639.5 million, and wholesale revenue grew 19.5% to $362.8 million. Recently acquired Jimmy Choo contributed $172.7 million to revenue.

Management also noted same-store sales growth in accessories, footwear and women's ready to wear. And stores renovated to the new luxury concept outperformed the rest of the chain.

Outlook: The company lifted its full-year EPS guidance by 25 cents to $4.90-$5.00, above consensus for $4.77, on revenue of $5.125 billion, above consensus for $5.1 billion and up from a prior view of $5.1 billion. For fiscal Q2, Kors sees EPS of $1.03-$1.08, below views for $1.24, on revenue of $1.26 billion, below consensus for $1.29 billion, with same-store sales to decline in the low-single-digits.

Stock: Shares jumped 6.5% to 69.88 on the stock market today, retaking their 50-day average and closing in on a 70.10 buy point. Earlier in the day, Michael Kors surged as high as 70.99, indicating a breakout, before paring gains.

Among peers, Ralph Lauren (RL) rose 0.8%, Canada Goose (GOOS), which reports early Thursday, fell 0.1%, and Apparel-Clothing Manufacturing Industry Group leader VF Corp. (VFC) added 0.8%.

Caution On Michael Kors Stock

CFRA Research senior analyst Angelo Zino raised his price target on Michael Kors stock to 70 from 65 and maintained a hold rating. However, he sees some challenges ahead.

"Heightened inventory levels will likely continue to be a headwind and we view potential for further upside as limited, as we see KORS' strategic acquisition strategy having a difficult time reviving organic growth," Zino said in a research note. "Valuation does look more positive with signs of momentum in footwear, ready-to-wear and accessories, but we are cautious."

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The post Michael Kors Is Just Below A Buy Point After Near Breakout On Strong Earnings appeared first on Investor's Business Daily.