Inside the Michael Kors store at Rockefeller Center.

Runway 2020 — the Michael Kors Holdings Limited strategic plan — appears to be showing some traction, particularly in the Americas.

Disclosed a year ago, Runway 2020 included a renovation of stores over time to reflect a new luxury concept. That seems to be resonating with consumers as Kors chairman and chief executive officer John D. Idol told Wall Street analysts on Wednesday that the company remains “encouraged by the performance of these stores, which are outperforming the balance of the chain.” The plan is to renovate about 200 locations in its store base over the next two years, he said. In addition to a new assortment for its core handbag and accessories business, the Michael Kors brand will offer a new fine jewelry line this fall to complement its luxury lifestyle assortment.

Idol’s comments were made during a conference call to analysts after the company reported better-than-expected first-quarter results. For the quarter ended June 30, the company said adjusted earnings per share (EPS) was $1.32, compared with Wall Street’s consensus of 95 cents. Revenues rose 26.3 percent to $1.20 billion, versus consensus estimates of $1.14 billion.

Results were good enough to warrant raising the company’s full-year fiscal 2019 outlook. The company now is forecasting full-year adjusted EPS at between $4.90 to $5.00, up from the prior guidance of $4.65 to $4.75. And for the full year, it guided revenues to the range of $5.123 billion.

The better results and raised forecasts impressed Wall Street: Shares of Michael Kors on Wednesday closed up 6.7 percent to $70.01 in Big Board trading.

Perhaps, more importantly, sales in the Americas improved in the period and seem to be on a growth track, compared with sales at its European operations.

Idol told analysts, “We are encouraged in particular by our Americas retail results, which returned to positive comparable-store sales in the quarter.”

Canaccord Genuity consumer analyst Camilo Lyon noted that “North American comparable-store sales were positive in [the first quarter] for the first time in nine quarters.” Comps growth in the quarter was up 0.2 percent, compared with the year-ago quarter when comps were down 5.9 percent. Analyst Dana Telsey of Telsey Advisory Group noted that the 0.2 percent comps growth in the quarter “came in slightly below the consensus estimate for a 0.6 percent increase.” She has a “Market Perform” rating on shares of Michael Kors.

Idol addressed the sales trends in North America during the call. He told analysts: “The wholesale channel in North America feels good to us. The American consumer is healthy and our fashion innovation, which is led by Michael and our design team, is resonating with customers, and we’re seeing that across our accessories business. We’re seeing that across our footwear business and our women’s ready-to-wear business.”

He also noted that full-price sell-throughs continue to improve, and that there’s been traffic inside the department store channel.

“The declines that we had seen previously are beginning to become mitigated and we’re getting growth on the e-commerce side, so I would tell you [that] inside the U.S. market we feel good. We’re seeing very nice reorders [and] we’re a little light in inventory in some of our department store channels, so we actually needed to ship some merchandise a little earlier,” the ceo said.

Idol explained that the company had planned inventory to be down, and what Kors has seen so far has been sales up in most channels via conversion and at average unit retail, “so all that seems to be playing out in an environment that feels healthy to us in North America. We also commented that there was reduced allowance expectations, and that’s really just a result of better full-price sell-throughs.”

In contrast with the company’s European business for the Kors brand, Idol said overall inventories for the label are down 10 percent but down in the high double-digits for the European business, which he described as “a very, very aggressive place to be in terms of inventory reduction.” The ceo said the company has been working on having “more scarcity of product, which we believe creates more desirability, and we know that takes about a year, sometimes as long as a year and a half to really get a foothold and you saw us get through that process in North America.”

The company is also reducing the amount of sell-in at the department store level on the European front, and “we are starting to see some reorder happen.” He added that the brand also “got a little lean on inventory so we moved some shipments up a little bit to freshen up the stores a little earlier than we initially anticipated. So again, we’re on track, but I would tell you that it’ll take through the balance of our fiscal year until you see the retail business for us in Europe return to positive growth.”

For Jimmy Choo, Idol said the company is “extremely encouraged by the performance of the brand during the quarter, delivering pro forma revenues that grew in the low-double digits, led by comparable-store sales increases in the high-single digits.” The results were driven by “robust performance” in the footwear segment, with Idol noting that the brand “dominated the red carpet during this year’s Met Gala in May, with 22 celebrities wearing our shoes.”  He added that accessories is a key strategic focus for the brand, including the new Marianne handbag group that will be available this fall. The company acquired Choo last year.

In addition to expanding the Choo flagship store on Madison Avenue in Manhattan during the quarter, Idol said the brand opened nine net new stores in the three-month period. He noted a “strong runway to expand Jimmy Choo’s presence, particularly in Asia,” and said the company is on track to achieve its goal of $1 billion in revenue for the brand.

Randal J. Konik, analyst at Jefferies, on Wednesday raised the price target for shares of Michael Kors to $93. He has a “Buy” rating, and said results in the quarter “demonstrated solid inventory control, improved sell-through, better gross margins, …”

Not every analyst was jumping on board the Michael Kors train, though. Like Telsey, Matthew R. Boss at J.P. Morgan has a “Neutral” rating on shares of Kors. Boss wrote in a research note that lower-margin footwear and apparel categories are becoming “larger pieces of the pie (lifestyle rather than handbag brand).”  And with multi-year growth investments on the agenda, Boss noted those initiatives would limit margin expansion on an earnings before interest and taxes (EBIT) basis. Between the lower-margin categories and the growth investments, Boss sees potential pressures on both the top and bottom lines.

Jimmy Choo's new fragrance: Fever

Jimmy Choo’s new fragrance: Fever  Courtesy Photo