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Michael Kors beats earnings and revenue estimates, misses on store sales

A general view outside of a Michael Kors location
Christopher Jue | Michael Kors | Getty Images

Global luxury brand Michael Kors' stock dipped more than 2 percent after beating earnings and revenue estimates, but missed on comparable store sales.

The company reported an adjusted 88 cents per share versus estimates of 74 cents per share.

Michael Kors' revenues beat the $953 million estimate at $987.9 million.

"We delivered another quarter of strong growth in our North American digital flagships, further expanded our presence globally, particularly in Asia, and expanded our fashion product offerings," CEO John D. Idol said in a press release. "However, this progress was muted by the continued decline in mall traffic trends as well as a decrease in tourism in certain major cities which negatively impacted our comparable sales performance during the quarter."

Idol also said the company will debut its new smartwatches, trackers and fragrances.

The brand's comparable store sales missed expectations by dropping more than 7 percent. Analysts estimated that sales would only drop 4.8 percent.

"Michael Kors talks about foreign tourism being an additional drag to their business in retail," Anna Andreeva, Oppenheimer's senior analyst covering specialty retail, told CNBC's "Squawk on the Street" on Wednesday. "Interestingly, full-priced stores are experiencing significant declines, so it's not just the outlet channel."

Andreeva also noted Michael Kors will be pulling some of its couponing and promotions in wholesale as a way to rejuvenate the brand.

She said that reliance on wholesale is decreasing and that she's worried about the profitability of the company.

"Michael Kors' stock has really been inexpensive for some time now," Adreeva said. "Some of these inexpensive retail stocks are typically cheap for a reason. With Michael Kors, it's just not clear how much lower can this wholesale channel reset and what happens with profitability."

Michael Kors expects total revenue between $1.07 billion and $1.08 billion.

Michael Kors' shares have climbed more than 24 percent in the year to date.

Michael Kors year-to-date performance: