British Virgin Islands | N/A | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
ITEM 5.07 | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
NAME | NUMBER OF SHARES VOTED | FOR | AGAINST | ABSTAIN | BROKER NON-VOTES |
Michael Kors | 137,164,267 | 122,612,274 | 3,238,543 | 233,903 | 11,079,547 |
Judy Gibbons | 137,164,267 | 121,768,162 | 4,070,099 | 246,459 | 11,079,547 |
Jane Thompson | 137,164,267 | 121,696,307 | 4,247,341 | 141,072 | 11,079,547 |
NUMBER OF SHARES VOTED | FOR | AGAINST | ABSTAIN | BROKER NON-VOTES | |
137,164,267 | 133,350,996 | 363,985 | 3,449,286 | 0 |
NUMBER OF SHARES VOTED | FOR | AGAINST | ABSTAIN | BROKER NON-VOTES | |
137,164,267 | 110,939,095 | 13,945,914 | 1,199,711 | 11,079,547 |
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
Exhibit No. | ||
99.1 | Press release issued by Michael Kors Holdings Limited, dated August 10, 2016. |
MICHAEL KORS HOLDINGS LIMITED | |||
Date: August 10, 2016 | |||
By: | /s/ Joseph B. Parsons | ||
Name: | Joseph B. Parsons | ||
Title: | Executive Vice President, Chief Financial Officer, Chief Operating Officer and Treasurer | ||
• | Total revenue increased 0.2% to $987.9 million from $986.0 million in the first quarter of fiscal 2016. On a constant currency basis, total revenue was flat versus the prior fiscal year. |
• | Retail net sales increased 7.6% to $562.9 million driven primarily by 221 net new store openings since the end of the first quarter of fiscal 2016, including 145 stores associated with the Company's recent acquisitions of Greater China and South Korea and the consolidation of the Latin American operations. Comparable sales decreased 7.4%. On a constant currency basis, retail net sales grew 7.4%, and comparable sales decreased 7.6%. Wholesale net sales decreased 7.0% to $394.4 million and on a constant currency basis, wholesale net sales decreased 7.2%. Licensing revenue decreased 20.9% to $30.6 million. |
• | Total revenue in the Americas decreased 5.0% to $690.8 million on a reported basis and decreased 4.8% on a constant currency basis. European revenue grew 3.3% to $224.0 million on a reported basis, and grew 2.9% on a constant currency basis. Revenue in Asia increased 74.5% to $73.1 million on a reported basis, and increased 67.7% on a constant currency basis. |
• | Gross profit decreased 2.0% to $591.3 million, and as a percentage of total revenue was 59.9%. Foreign currency translation and transaction negatively impacted gross profit margin by approximately 100 basis points. This compares to gross margin of 61.2% in the first quarter of fiscal 2016. |
• | Income from operations was $186.9 million, or 18.9% as a percentage of total revenue. This compares to $248.6 million, or 25.2% as a percentage of total revenue, for the first quarter of fiscal 2016. |
• | Net income attributable to MKHL was $147.1 million, or $0.83 per diluted share, based on a 21.2% tax rate and 176.6 million weighted average diluted shares outstanding. Excluding $8.9 million after-tax, or $0.05 per diluted share, of one-time costs related to the acquisition of the Company's Greater China licensee, net income attributable to MKHL for the first quarter of fiscal 2017 was $156.0 million, or $0.88 per diluted share. Net income attributable to MKHL for the first quarter of fiscal 2016 was $174.4 million, or $0.87 per diluted share, based on a 29.4% tax rate and 200.1 million weighted average diluted shares outstanding. |
• | At July 2, 2016, the Company operated 771 retail stores, including concessions, compared to 550 retail stores, including concessions, at the end of the same prior-year period. The Company had 110 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 881 Michael Kors stores worldwide at the end of the first quarter of fiscal 2017. |
Three Months Ended | ||||||||
July 2, 2016 | June 27, 2015 | |||||||
Net sales | $ | 957.3 | $ | 947.3 | ||||
Licensing revenue | 30.6 | 38.7 | ||||||
Total revenue | 987.9 | 986.0 | ||||||
Cost of goods sold | 396.6 | 382.4 | ||||||
Gross profit | 591.3 | 603.6 | ||||||
Total operating expenses | 404.4 | 355.0 | ||||||
Income from operations | 186.9 | 248.6 | ||||||
Other (income) expense, net | (0.3 | ) | 0.8 | |||||
Interest expense, net | 0.3 | 0.1 | ||||||
Foreign currency losses | 1.3 | 0.7 | ||||||
Income before provision for income taxes | 185.6 | 247.0 | ||||||
Provision for income taxes | 39.3 | 72.6 | ||||||
Net income | 146.3 | 174.4 | ||||||
Less: Net loss attributable to noncontrolling interest | (0.8 | ) | — | |||||
Net income attributable to MKHL | $ | 147.1 | $ | 174.4 | ||||
Weighted average ordinary shares outstanding: | ||||||||
Basic | 174,158,571 | 196,977,021 | ||||||
Diluted | 176,613,751 | 200,054,494 | ||||||
Net income per ordinary share: | ||||||||
Basic | $ | 0.84 | $ | 0.89 | ||||
Diluted | $ | 0.83 | $ | 0.87 |
July 2, 2016 | April 2, 2016 | June 27, 2015 | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 337.1 | $ | 702.0 | $ | 808.5 | ||||||
Receivables, net | 202.8 | 307.9 | 252.5 | |||||||||
Inventories | 606.9 | 546.8 | 606.5 | |||||||||
Prepaid expenses and other current assets | 109.3 | 113.1 | 118.1 | |||||||||
Total current assets | 1,256.1 | 1,669.8 | 1,785.6 | |||||||||
Property and equipment, net | 798.7 | 758.2 | 624.2 | |||||||||
Intangible assets, net | 464.3 | 67.4 | 68.9 | |||||||||
Goodwill | 122.2 | 23.2 | 14.0 | |||||||||
Deferred tax assets | 16.9 | 24.5 | 21.4 | |||||||||
Other assets | 32.5 | 23.7 | 31.1 | |||||||||
Total assets | $ | 2,690.7 | $ | 2,566.8 | $ | 2,545.2 | ||||||
Liabilities and Shareholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 167.4 | $ | 131.4 | $ | 172.1 | ||||||
Accrued payroll and payroll related expenses | 43.1 | 59.7 | 38.7 | |||||||||
Accrued income taxes | 45.0 | 51.6 | 29.7 | |||||||||
Short-term debt | 248.6 | — | — | |||||||||
Accrued expenses and other current liabilities | 197.8 | 192.8 | 94.9 | |||||||||
Total current liabilities | 701.9 | 435.5 | 335.4 | |||||||||
Deferred rent | 120.5 | 106.4 | 94.8 | |||||||||
Deferred tax liabilities | 88.5 | 3.5 | 5.9 | |||||||||
Long-term debt | — | 2.3 | — | |||||||||
Other long-term liabilities | 22.1 | 19.6 | 19.9 | |||||||||
Total liabilities | 933.0 | 567.3 | 456.0 | |||||||||
Commitments and contingencies | ||||||||||||
Shareholders’ equity | ||||||||||||
Ordinary shares, no par value; 650,000,000 shares authorized; 208,759,289 shares issued and 168,997,105 outstanding at July 2, 2016; 208,084,175 shares issued and 176,441,891 outstanding at April 2, 2016, and 207,184,790 shares issued and 193,372,032 outstanding at June 27, 2015 | — | — | — | |||||||||
Treasury shares, at cost (39,762,184 shares at July 2, 2016; 31,642,284 shares at April 2, 2016; and 13,812,758 shares at June 27, 2015) | (2,054.5 | ) | (1,650.1 | ) | (848.8 | ) | ||||||
Additional paid-in capital | 732.5 | 718.9 | 662.5 | |||||||||
Accumulated other comprehensive loss | (78.3 | ) | (80.9 | ) | (67.6 | ) | ||||||
Retained earnings | 3,154.9 | 3,007.8 | 2,343.1 | |||||||||
Total shareholders’ equity of MKHL | 1,754.6 | 1,995.7 | 2,089.2 | |||||||||
Noncontrolling interest | 3.1 | 3.8 | — | |||||||||
Total shareholders’ equity | 1,757.7 | 1,999.5 | 2,089.2 | |||||||||
Total liabilities and shareholders’ equity | $ | 2,690.7 | $ | 2,566.8 | $ | 2,545.2 |
Three Months Ended | ||||||||||
July 2, 2016 | June 27, 2015 | |||||||||
Revenue by Segment and Region: | ||||||||||
Retail net sales: | The Americas | $ | 392.2 | $ | 396.7 | |||||
Europe | 119.1 | 107.0 | ||||||||
Asia | 51.6 | 19.6 | ||||||||
Total Retail Net Sales | 562.9 | 523.3 | ||||||||
Wholesale net sales: | The Americas | 282.1 | 309.1 | |||||||
Europe | 90.8 | 92.6 | ||||||||
Asia | 21.5 | 22.3 | ||||||||
Total Wholesale Net Sales | 394.4 | 424.0 | ||||||||
Licensing revenue: | The Americas | 16.5 | 21.5 | |||||||
Europe | 14.1 | 17.2 | ||||||||
Total Licensing Revenue | 30.6 | 38.7 | ||||||||
Total Revenue | $ | 987.9 | $ | 986.0 | ||||||
Income from Operations: | ||||||||||
Retail | $ | 66.6 | $ | 120.9 | ||||||
Wholesale | 105.0 | 106.3 | ||||||||
Licensing | 15.3 | 21.4 | ||||||||
Total Income from Operations | $ | 186.9 | $ | 248.6 | ||||||
Operating Margin: | ||||||||||
Retail | 11.8 | % | 23.1 | % | ||||||
Wholesale | 26.6 | % | 25.1 | % | ||||||
Licensing | 50.0 | % | 55.4 | % | ||||||
Total Operating Margin | 18.9 | % | 25.2 | % | ||||||
July 2, 2016 | ||||||||||
Store Count and Square Footage by Region: | Store Count | Square Footage | ||||||||
The Americas (U.S., Canada and Latin America) | 393 | 1,210,264 | ||||||||
Europe | 183 | 480,481 | ||||||||
Asia | 195 | 355,397 | ||||||||
Total | 771 | 2,046,142 |
Three Months Ended | % Change | |||||||||||||
July 2, 2016 | June 27, 2015 | As Reported | Constant Currency | |||||||||||
Retail net sales | $ | 562.9 | $ | 523.3 | 7.6 | % | 7.4 | % | ||||||
Wholesale net sales | 394.4 | 424.0 | (7.0 | )% | (7.2 | )% | ||||||||
Licensing revenue | 30.6 | 38.7 | (20.9 | )% | (20.9 | )% | ||||||||
Total revenue | $ | 987.9 | $ | 986.0 | 0.2 | % | — | % |
Three Months Ended | ||||
July 2, 2016 | ||||
Net income attributable to MKHL, as reported | $ | 147.1 | ||
Transaction costs related to acquisition of Greater China, net of taxes of $2.4 million | 8.9 | |||
Net income, as adjusted | $ | 156.0 | ||
Weighted average diluted ordinary shares outstanding | 176,613,751 | |||
Diluted net income per ordinary share attributable to MKHL, as reported | $ | 0.83 | ||
Impact of transaction costs, per share | $ | 0.05 | ||
Adjusted diluted net income per ordinary share attributable to MKHL | $ | 0.88 |