Michael Kors Holdings announced its financial results for the fiscal 2017 first quarter ended July 2, 2016.
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Total revenue increased 0.2% to $987.9 million from $986.0 million in the first quarter of fiscal 2016. On a constant currency basis, total revenue was flat versus the prior fiscal year.
Retail net sales increased 7.6% to $562.9 million driven primarily by 221 net new store openings since the end of the first quarter of fiscal 2016, including 145 stores associated with the company's recent acquisitions of Greater China and South Korea and the consolidation of the Latin American operations.
Comparable sales decreased 7.4%. On a constant currency basis, retail net sales grew 7.4%, and comparable sales decreased 7.6%. Wholesale net sales decreased 7.0% to $394.4 million and on a constant currency basis, wholesale net sales decreased 7.2%. Licensing revenue decreased 20.9% to $30.6 million.
Total revenue in the Americas decreased 5.0% to $690.8 million on a reported basis and decreased 4.8% on a constant currency basis. European revenue grew 3.3% to $224.0 million on a reported basis, and grew 2.9% on a constant currency basis.
Revenue in Asia increased 74.5% to $73.1 million on a reported basis, and increased 67.7% on a constant currency basis.
Gross profit decreased 2.0% to $591.3 million, and as a percentage of total revenue was 59.9%. Foreign currency translation and transaction negatively impacted gross profit margin by approximately 100 basis points. This compares to gross margin of 61.2% in the first quarter of fiscal 2016.
Income from operations was $186.9 million, or 18.9% as a percentage of total revenue. This compares to $248.6 million, or 25.2% as a percentage of total revenue, for the first quarter of fiscal 2016.
Net income attributable to MKHL was $147.1 million, or $0.83 per diluted share, based on a 21.2% tax rate and 176.6 million weighted average diluted shares outstanding.
Excluding $8.9 million after-tax, or $0.05 per diluted share, of one-time costs related to the acquisition of the company's Greater China licensee, net income attributable to MKHL for the first quarter of fiscal 2017 was $156.0 million, or $0.88 per diluted share.
Net income attributable to MKHL for the first quarter of fiscal 2016 was $174.4 million, or $0.87 per diluted share, based on a 29.4% tax rate and 200.1 million weighted average diluted shares outstanding.
At July 2, 2016, the company operated 771 retail stores, including concessions, compared to 550 retail stores, including concessions, at the end of the same prior-year period.
The company had 110 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 881 Michael Kors stores worldwide at the end of the first quarter of fiscal 2017. ■