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Michael Kors Holdings Ltd KORS
Q4 2013 Earnings Call Transcript

Transcript Call Date 05/29/2013

Operator: Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Michael Kors Holdings Limited Fourth 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. As a reminder, today's conference is being recorded.

Now, I would like to turn the conference over to Ms. (Christina Lack), Vice President and Treasurer. You may begin.

Christina Lack - VP and Treasurer: Good morning, and thank you for joining us for our fourth quarter earnings call. Presenting on today's call are John Idol, Chairman and Chief Executive Officer; and Joe Parsons, Chief Financial 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 SEC filings, which are available on the Company's 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 Michael Kors's fourth quarter and full year 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 fiscal year and share with you an update on our strategic growth plans. Joe will then provide a detailed review of our fourth quarter financial results. Additionally, he will provide an outlook for our fiscal 2014 first quarter and full year.

Michael Kors delivered record results in 2013. Total revenue grew 68%, exceeding the $2 billion mark. Comparable store sales increased 40% and operating income grew 132% to $630 million, excluding one-time items.

Our global retail store base increased from 237 locations to 304 locations, including concessions. Our international presence expanded with revenue growth of 103% in Europe and 119% in Japan. We reached approximately 950 shop-in-shops globally in accessories, footwear, and women's wear.

We attribute our outstanding success to the creative vision of Michael Kors, our exceptional product offering, a highly talented management team, and our operational excellence.

The year ended on a strong note, with continued momentum in the fourth quarter as the brand strength, innovative fashion design and jet-set in-store experience drove strong sales and earnings across all businesses and geographies.

Total revenue in the fourth quarter grew 57% to $597 million. Gross margin expanded 200 basis points and income from operations grew 102% to $155 million, excluding one-time items.

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