The company also raised full year fiscal 2018 guidance and now expects diluted EPS at between $3.62 to $3.72, up from prior guidance of between $3.57 to $3.67 when the company posted fourth quarter results on May 31. Shares jumped 19.3 percent to $44.40 in morning trading.
For the three months ended July 1, net income fell 14.7 percent to $125.5 million, or 80 cents a diluted share, from net income of $147.1 million, or 83 cents, a year ago. Excluding 7 cents a diluted share for one-time costs connected with the company’s acquisition of its Greater China licensee, adjusted diluted EPS for the quarter was 90 cents. Total revenues slipped 3.6 percent to $952.4 million from $987.9 million. Total revenues included a 3.5 percent decrease in net sales to $923.5 million.
Wall Street was expecting 62 cents a diluted share on revenues of $918.57 million.
John D. Idol, chairman and chief executive officer, said the Q1 beat was “driven largely by better than anticipated retail comparable sales results in both North America and Europe.”
While results were better than expected, Idol said fiscal 2018 would remain a “transition year” as the firm executes its Runway 2020 strategic plan. “While 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,” Idol said.
The company said retail net sales in the quarter rose 10.1 percent to $619.9 million, while wholesale net sales fell 23 percent to $303.6 million. Licensing revenue slipped 5.6 percent to $28.9 million. Driving retail sales was the opening of 67 new stores. Comparable store sales fell 4.9 percent in the quarter.
As for the Jimmy Choo acquisition, Idol said, “In addition, we are pleased to have recently announced plans to form a global fashion luxury group. Our agreement to acquire Jimmy Choo will bring together two iconic brands that are industry leaders in style and trend.”
The company has said it would keep the two businesses separate. Idol noted again that the company is committed to “supporting Jimmy Choo’s strong brand equity and fashion leadership as we work with its talented management team to realize the brand’s significant growth potential.”