Great investment opportunity Business description and segmentationsmichaelKors(Nyse:Kors)Is a bvi incorporated, london headquartered global luxury brand focused on women's"Accessible luxury"Products including accessories, footwear, apparel and other categories.Through retail, wholesale and e commerce, the company has a presence in approximately 100 countries. In the last five years,Kors was transformed from a business with less than $1 billion revenue to a major player in its sector with about $4.4 billion revenue in FY2015. Kors separates its business into three segments:1)Retail, 2)Wholesale and 3)Licensing.The well mixed and managed product channels allowed kors to capture a broad set of customers while maintaining high operating margins. 96% of the company's revenue comes from retail and wholesale channels.The two channels contribute roughly the same level of revenue at this time.Kors generates the rest of 4% revenue through the high margin licensing channel. From a global perspective, the traditional north america markets account for 84% of the company's total revenue.Europe and japan are the company's biggest international focus. What makes kors a good companya rapid growing industry and sector Over the past few years, the accessory fashion luxury segment has been leading industry and sector performance.Now with the industry and sector expected to continue growing at 12.71% and 15.37% per annum respectively for the next half decade, we believe KORS is well positioned to continue taking advantage of this trend.Roughly from 18 40), especially compared the customers of most relevant peer Coach Inc. (Nyse:Coh).This demographic represents a very favorable group of customers in the long term as they either have or gong to have stable incomes, thus their preference of kors over other brands will translate into a strong source of recurring revenue for kors. Continued growth in retail segment Two sources contribute to the company's future retail growth prospects:1)Overall footage growth, 2)Productivity growth. As of december 2014, kors had 509 company owned retail stores, about 200 stores short of its 700 target. Also, with impressive productivity growth in the past few years, kors retail stores now operate at an impressive level of productivity, averaging about $4mil per store.While we expect the rate of increase productivity to slow down, it will continue contributing to future topline growth. Continued growth in wholesale segment Similar to the retail segment, we expect the company's wholesale segment to continue growing through two sources:1)Opening of michael kors wallets sloan new wholesale doors, 2)Productivity growth through continued shop in shops conversion. Kors has been very successful in its efforts to expand wholesale footprints and convert traditional wholesale doors in shop in shops which have achieved 3x the productivity of traditional wholesale doors historically. The wholesale segment of kors is less concentrated in the north america market than its retail segment, with about one third of doors located internationally.We expect kors to continue developing its global wholesale channel while shifting its shop in shops converting efforts to global locations. Strong cash michael kors womens generating ability Kors operates the business very efficiently:It managed its working capital well michael kors outlet online with high working capital turnover and high lease adjusted invested capital turnover.Kors also generates an attractive operating profit margin and impressive roic.Overall, what these bring to kors is an excellent ability to generate excess cash even during the expansion phase which requires large investments in working capital and long term operating assets.
English
討論區: