Michael Kors' quarterly revenue rose nearly 11 percent, the strongest growth in a year, as demand for its handbags and accessories rose in the Americas, and the company said it would buy back up to $1 billion in shares. Shares of Michael Kors, which also said it had acquired its Greater China licensee, surged about 11 percent to $47.50 in premarket trading on Wednesday.
Michael Kors has been refreshing its product lines faster, tightly managing its wholesale distribution to retain the exclusivity of its products and pushing into online retailing to boost its sales growth. Sales in the Americas, its biggest market, rose 4.6 percent to $879.1 million in the fourth quarter. The region accounted for nearly three-quarters of Michael Kors' total revenue.
The company also said it bought Michael Kors (HK) Ltd, its exclusive licensee in China and some regions in Asia, for $500 million in cash. "We believe that our brand is gaining strong momentum in Greater China, making it the ideal time for us to integrate this territory into our business," Chief Executive John Idol said in a statement.
Sales at stores open for at least 13 months rose 0.3 percent. Analysts on average had expected a 0.1 percent rise, according to research firm Consensus Metrix. The net income attributable to Michael Kors fell 3 percent to $177 million, or 98 cents per share, in the quarter ended April 2, hurt by a stronger dollar. Revenue rose to $1.2 billion from $1.08 billion.