(Reuters) - Fashion house Michael Kors Holdings Ltd's efforts to revamp its high-end shoe brand Jimmy Choo paid off as the company topped Wall Street's quarterly profit estimates on Wednesday and raised its full-year earnings forecast.
The company spruced up its shoe business last year with the addition of Jimmy Choo, banking on a brand whose stilettos have been worn by the rich and famous, ranging from Princess Diana to "Sex and the City" star Sarah Jessica Parker.
Kors has spent heavily to reposition the brand as more youth-focused. Jimmy Choo has traditionally been seen as a brand preferred by rich older women.
Jimmy Choo sales came in at $172.7 million, comfortably beating analysts' average estimate of $143.65 million, also benefiting from a shift in timing of certain wholesale shipments from the second quarter to the first. The brand contributed 14 percent to first quarter sales.
Shares of the New York-based company rose 3.6 percent to $67.95 before the bell on Wednesday.
The company raised its full-year earnings forecast range by 25 cents to $4.90 to $5.00 per share, above analysts' estimates of $4.77.
Kors now expects its investments in Jimmy Choo to have a flat to 5 cent impact on its 2019 earnings, down from a prior forecast of a 5-10 cent hit.
Kors has also been pulling heavily discounted products off department store shelves, forcing customers to shop at its own retail outlets where they pay full price for its handbags and watches.
The move helped the company earn a profit of $1.32 per share, excluding certain items, in the quarter, easily beating the average estimate of 95 cents per share.
Net income attributable to Kors rose to $186.4 million, or $1.22 per share, in the quarter ended June 30, from $125.5 million, or 80 cents per share, a year earlier.
Excluding certain items, the company earned $1.32 per share, beating the average estimate of 95 cents per share.
Total revenue rose 26.3 percent to $1.20 billion, beating the average analyst estimate of $1.14 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Uday Sampath in Bengaluru; Editing by Saumyadeb Chakrabarty)
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