Shares in luxury retailer Michael Kors rocketed today after the company unveiled better than expected profit in the first quarter and lifted its full-year forecasts.
Michael Kors' shares closed 21 per cent higher at $45.25 (£34.83) as sales of its premium handbags rose.
The retailer posted a 15 per cent drop in profit to $125.5m, or 80 cents per share, beating Wall Street's expectations of 62 cents, according to Thomson Reuters.
Same-store sales fell 5.9 per cent in the quarter, which beat analysts' forecasts of an 8.9 per cent decline, according to Consensus Metrix.
Why it's interesting
As customers shift to online shopping, Kors has struggled to maintain same-store sales, and a reliance on promotions had dented the brand's value.
Now, Kors is pursuing a multi-brand strategy for growth and diversifying into new products, like its purchase of high-end shoe brand Jimmy Choo announced last month.
That deal is set to add about $275m to the company's sales in the second half of the year.
Excluding that, Kors expects fiscal 2018 revenue of about $4.28bn, which tops its previous forecast of $4.25bn.
What Michael Kors said
John Idol, chairman and chief executive, said:
We are encouraged by our first quarter performance, although we continue to believe that fiscal 2018 will be a transition year for our company, as we focus on laying the foundation for the future by executing on our strategic plan, Runway 2020.
While it is still early in the process, we are making meaningful progress enhancing our assortments, deepening our connection with consumers, and elevating our jet set luxury experience in our stores and digital flagships.