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Michael Kors Holdings Ltd KORS
Q2 2013 Earnings Call Transcript

Transcript Call Date 11/13/2012

Operator: Ladies and gentlemen, thank you for standing by. Welcome to Michael Kors Holdings Limited Second Quarter Fiscal 2013 Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. As a reminder, today's conference is being recorded.

Now, I would like to turn the conference over to Ms. (Christina Lack). Please go ahead, Ma'am.

Christina Lack - IR: Good morning and thank you for joining us for our second quarter earnings call. Presenting on today's call are John Idol, Chairman and Chief Executive Officer who is calling in from Bangkok; and Joe Parsons, Chief Financial Officer and Chief Operating Officer.

Before we begin, let me remind you that certain statements made on this call may constitute forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ from those that we expect. Those risks and uncertainties are described in today's press release and in the Company's registration statement on Form F-1, which are available on the Company website, www.michaelkors.com.

Investors should not assume that the statements made during the call will remain operative at a later time and the Company undertakes no obligation to update any information discussed on the call.

I will now turn the call over to Michael Kors' Chairman and Chief Executive Officer, Mr. John Idol.

John D. Idol - Chairman and CEO: Thank you, Christina. Good morning and welcome to our second quarter fiscal 2013 earnings call. With me today is Joe Parsons, Chief Financial and Chief Operating Officer. I will begin the discussion with a brief overview of the quarter and share with you an update on our strategic growth plans. Joe will then provide a detailed review of our second quarter financial performance. Additionally, he will provide our outlook for the third quarter of fiscal 2013 and the full year. We are extremely pleased with our second quarter performance across our retail, wholesale and licensing segments throughout North America, Europe and Asia. Our results reflect the ongoing momentum of the Michael Kors brand and the successful execution of our key growth strategies. Michael Kors' creative vision and design leadership provides us the ability to maintain a unique position in the marketplace as we continue to expand our presence as a global luxury lifestyle brand.

Our performance was driven by continued growth in comparable store sales, strong performance of our new stores, successful conversion to shop-in-shops in department stores and the advances in our international expansion strategy as we continue to build brand awareness. We have a talented management team, strong infrastructure and a healthy balance sheet that will enable us to successfully execute our strategic growth initiatives.

During the quarter, we continued to advance on our six key growth initiatives. First, in North America, our 45% comparable store sales increase represents the 26th quarter of consecutive growth in this region. Second, our retail expansion efforts continued in North America with 10 new stores opening in the quarter. Third, we continue to convert North American wholesale department store doors into branded shop-in-shops. Fourth, our presence in Europe expanded with additional retail and wholesale door openings. Fifth, we continue to develop our business in Japan and sixth we continue to build its foundation for growth other areas of the Far East through regional licenses. I would now like to review w few financial highlights for our second quarter and then discuss our segments, our operations by region and finally our expansion in the Far East through our regional licenses.

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