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Michael Kors sales makes shareholders happy but 2016 outlook dims a bit

Fashion brand Michael Kors enjoyed a robust holiday sales season and shareholders are happy with the news.

February 4, 2016

Fashion brand Michael Kors enjoyed a robust holiday sales season and shareholders are happy with the news yet the outlook for this year isn't quite as bright as analysts had been hoping,

An increased consumer demand for high-end foot-wear and accessories helped Michael Kors keep its sales decline to 0.9 percent in the third quarter ended Dec. 26, which was far below street estimates of a 4.5-percent decline, according to a Reuters report.

Its stock, in response, spiked 16 percent early Tuesday. Reuters cited the retailer's moves with regard to online marketing as the prime driver for solid sales.

"Investors have been concerned that the company has been in a death spiral ... These results are yet another instance of upside surprise and (are) better than feared," Nomura Securities analyst Simeon Siegel told Reuters.

The company't total revenue jumped 6.3 percent to $1.40 billion and net income dipped $294.6 million from $303.7 million compared to a year prior.

"We are pleased with our third-quarter results, as we delivered revenue, comparable-store sales and earnings growth ahead of our expectations," CEO John Idol stated in an announcement.

Yet, looking forward, the fashion retailer believes it won't hit initial 2016 fiscal expectations. It predicts revenue will land between $1.13 billion and $1.15 billion, while analysts are hoping for $1.16 billion, according to Reuters.