Connect with us

Hi, what are you looking for?

Jewish Business News

Business

Michael Kors Tumbles After Credit Suisse Ratings Cut

Michael Kors

Sentiment towards luxury retailer Michael Kors has soured over the last year and a further blow was delivered on Tuesday as analysts at Credit Suisse downgraded the stock because of what they described as a “dramatic” increase in discounts for the retailer’s handbags, the Financial Times said.

Michael Kors, which for much of its time as a public company has been a favorite among investors, has lost that favor in recent months because of an increase in discounting, a strategy often used by mall-based retailers to attract customers, the report said.

Christian Buss, an analyst at Credit Suisse, said, “We are increasingly concerned about the level of promotions in the premium department store channel”.

Credit Suisse had expected the American handbag and accessories maker could sustain earnings growth in the mid-teens despite slowing same-store sales in the U.S., because the company had control over distribution, according to the Times.

“This no longer appears to be the case, as a combination of rising inventories and softening traffic has led to a dramatic step up in promotional activity across Michael Kors stores, eCommerce sites, and premium wholesale distribution partners, ” Buss said.

The analysts at Credit Suisse lowered their rating to “neutral” from “outperform” and cut their price target to $79 from $103, making it the worst performing stock on the S&P 500, the report said.

Shares of Michael Kors fell 9.6 per cent to $67.01 and have fallen over 24 per cent in the past six months. But the stock has more than doubled since its 2011 listing, the Times said.

Michael Kors is a high-end handbag, clothing, shoes and accessories retailer.

Newsletter



Advertisement

You May Also Like

World News

In the 15th Nov 2015 edition of Israel’s good news, the highlights include:   ·         A new Israeli treatment brings hope to relapsed leukemia...

Entertainment

The Movie The Professional is what made Natalie Portman a Lolita.

Travel

After two decades without a rating system in Israel, at the end of 2012 an international tender for hotel rating was published.  Invited to place bids...

VC, Investments

You may not become a millionaire, but there is a lot to learn from George Soros.