Shares of Michael Kors rose 6.6 percent Wednesday after reporting better-than-expected quarterly results.
The handbag maker posted fiscal fourth-quarter earnings of 98 cents per share on revenue of $1.2 billion. Analysts polled by Reuters expected the firm to post earnings of 96 cents on revenue of $1.15 billion.
Kors' revenue figure represents a 10.9 percent fourth-quarter increase year over year, but don't be fooled, Conlumino CEO Neil Saunders said Wednesday.
"Most of the uplift is thanks to the fact the company opened some 142 new stores over the past year and has also expanded its online operations. When these are factored out, underlying growth is anemic—rising by just 0.3 percent over the prior year," he said in a note to clients.
"Such a soft comparable number is disappointing, especially as it comes off the back of a very weak comparative in the prior year when same-store sales dropped by 5.8 percent. Licensing revenue also shrank, down by 13.6 percent on a year-over-year basis. That growth only came from expansionary activities rather than from underlying productivity gains shows on the bottom line where net income fell by 3.5 percent," Saunders said.
Entering Wednesday's session, Kors shares were up 6.6 percent, but had fallen 10.5 percent over the past 12 months.
KORS 12-month chart