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Michael Kors Holdings (KORS – Free Report) is a global luxury lifestyle company, founded by designer Michael Kors in 1981. They produce a range of products including handbags, watches, accessories, jewelry and fragrance products and footwear under Michael Kors Collection, MICHAEL Michael Kors and Michael Kors Mens.

Michael Kors stores are operated, either directly or through licensing partners. As of April 1, 2017, the company operated 827 retail stores, and 133 additional retail stores operated through licensing partners.

Weak Guidance Reflects Rising Challenges

The luxury lifestyle retailer reported fiscal fourth quarter 2017 ended April 1 earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.62 and up 3.1% year over year.

Total revenues were slightly below the Zacks Consensus Estimate and down 3.2% year over year. Comparable-store sales plunged 14.1%, worse than the street estimate of 13.4%.

 “Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels. In addition, our product and store experience did not sufficiently engage and excite consumers,” said the CEO.

For fiscal 2018, the company expects total revenue to be approximately $4.25 billion and for comparable sales to decrease in the high-single digit range. EPS is expected to be in the range of $3.57 – $3.67, significantly short of the street estimates and their earlier guidance.

With quarterly results, the retailer also announced that they would close 100 to 125 full-priced retail stores over the next two years.

Falling Estimates

Analysts have slashed their estimates for the company after weak guidance.Zacks Consensus Estimates for the current and next fiscal year have fallen to $3.55 per share and $3.65 per share from $3.94 and $3.79 respectively, before the report.

Falling estimates sent the stock to a Zacks Rank #5 (Strong Sell).