Shares of Michael Kors Holdings Ltd. rose 8.3 percent Wednesday as investors appeared to see some green shoots in the company’s second-quarter earnings report.

John D. Idol, chairman and chief executive officer, told analysts in a conference call: “Our rich suede saddlebags, mini bucket bags, and quilted bags emerged as top-selling items this past quarter. Merlot [as a color] was a hit in all departments. Watches with leather bands and new metal platings in navy and sable were met with great response, and our active footwear and backpack capitalized on the sport luxe trend.”

Idol said that Kors, like other brands, has seen the department store channel slowing, and the company will be monitoring and managing inventory to protect the brand and margins. As in the last quarter’s report, Idol touted the introduction of its largest assortment of new handbag groups — 22 — as well as new watch offerings. He noted the continued growth of men’s offerings, as for fall 2016 a “connected fashion accessories line” for the emerging tech space.

“We drove sequential improvement in comp-store sales. We continued to increase brand awareness in international markets. And we are seeing the acceptance of our newest handbag groups and watch styles,” Idol said.

The acceptance of newness in handbags and watches is perhaps one green shoot for the company. Another could be the plan to have fewer promotions. Idol said of the retail channel being more promotional than the company would like: “We’d like to have less inventory in the [department] stores, and have less of our brand appearing on sale, in particular, in that channel of distribution. So you’ll see that pullback happen…”

Idol disputed the notion that consumers aren’t buying handbags. He said the fashion trend — particularly among Millennials — is toward smaller bags, which translates into fewer bags at $350 and up, but more cross-bodies and large wallets, which have lower price points. He also noted that the saddlebags probably will “run out even before the holiday season” and the merlot options could run out before the fashion season ends. “We’re less excited about the lower transaction value, but we are on trend,” he said.

One plan to counter the consumers’ shift toward lower-priced items is price increases on some of the small leather goods, which Idol said are slightly underpriced compared with those of competitors, as well as some price increases for select cross-body styles. That, combined with fewer promotions, should give the company some margin improvement, the ceo said.

Company executives also touted the sequential improvement in comps from the first quarter to the second quarter, and said the handbag business is healthy, with watches having “an enormous impact” on comp-store declines.

Idol said North American digital flagship sales “continued to accelerate this quarter and we drove sequential improvement in our comp performance.” He said the company believes it is “well-positioned for a positive holiday period.”

Shares of Kors closed at $42.57 in Big Board trading. The company’s second-quarter results beat Wall Street analysts’ earnings per share consensus by 12 cents and bested revenue expectations, but were mixed as net income fell 6.7 percent and sales were boosted by 116 new net store openings. Comparable-store sales continued to decrease.

The company’s guidance for fiscal-year 2016 also was better than analysts’ consensus — a diluted EPS range of $4.38 to $4.42 on revenues of $4.6 billion to $4.65 billion, compared with analysts’ expectations of $4.31 in EPS on revenues of $4.65 billion. This was lower than projections in August, however, when the company posted first-quarter results. At that time, Kors forecast diluted EPS for fiscal 2016 in the $4.40 to $4.50 range, with revenues between $4.7 billion and $4.8 billion.

On Wednesday, the company provided third-quarter guidance that was lower than what analysts were expecting. Kors said it expects diluted EPS in the range of $1.44 to $1.48 on revenues of between $1.33 billion and $1.35 billion. That’s compared with analysts’ third-quarter expectations of diluted EPS of $1.53 on revenues of $1.4 billion.

For the three months ended Sept. 26, the company said net income was $193.1 million, or $1.01 in diluted EPS, compared with $207 million, or $1, a year ago. Total revenues rose 6.9 percent to $1.13 billion from $1.06 billion, which included a 7.6 percent gain in total net sales to $1.09 billion from $1.01 billion. Licensing income fell 8 percent to $43.2 million from $46.9 million. The company said retail net sales rose 7.5 percent to $532.8 million, which were driven by 116 new store openings. That increase was partially offset by an 8.5 percent decrease in comps. On a constant currency basis, retail net sales grew 14.7 percent, but comps fell 3.4 percent. Wholesale net sales rose 7.8 percent to $554 million, and grew 11.8 percent on a constant currency basis. By region, total revenues in the Americas rose 4.5 percent to $838.2 million, while European revenues rose 2.3 percent to $243.4 million. Revenue in Japan jumped 36.1 percent to $22.4 million.

Analysts were divided on their views of the company. Citi Research analyst Paul LeJuez has a “sell” rating on Kors, noting: “We continue to be concerned that the Kors brand is overdistributed, hurting the brand, and we expect comp declines to persist for some time.” But Jefferies’ Randal J. Konik has a “buy” rating, noting that the “fundamentals continue to show signs of stabilization and demand for the brand remains healthy. We see room for further improvement as product initiatives kick in, combined with easier compares.”

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