Michael Kors Holdings announced its financial results for the fiscal 2017 second quarter ended October 1, 2016.
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Total revenue decreased 3.7% to $1.09 billion from $1.13 billion in the second quarter of fiscal 2016. On a constant currency basis, total revenue decreased 3.7%.
Retail net sales increased 12.1% to $597.2 million driven primarily by 198 net new store openings since the end of the second quarter of fiscal 2016, including 137 stores associated with the Company's recent acquisitions of Greater China and South Korea.
Comparable sales decreased 5.4%. On a constant currency basis, retail net sales increased 12.1%, and comparable sales decreased 5.6%.
Wholesale net sales decreased 18.4% to $452.2 million and on a constant currency basis, wholesale net sales decreased 18.5%. Licensing revenue decreased 10.2% to $38.8 million.
Total revenue in the Americas decreased 11.1% to $745.1 million on a reported basis and decreased 11.1% on a constant currency basis.
European revenue grew 1.9% to $248.0 million on a reported basis, and grew 3.5% on a constant currency basis.
Revenue in Asia increased 96.5% to $95.1 million on a reported basis, and increased 87.5% on a constant currency basis.
Gross profit decreased 3.0% to $644.7 million, and as a percentage of total revenue was 59.2%.
Foreign currency translation and transaction favorably impacted gross profit margin by approximately 80 basis points. This compares to gross margin of 58.8% in the second quarter of fiscal 2016.
Income from operations was $203.7 million, or 18.7% as a percentage of total revenue. This compares to $273.1 million, or 24.2% as a percentage of total revenue, for the second quarter of fiscal 2016.
Net income attributable to MKHL was $160.9 million, or $0.95 per diluted share, based on a 20.7% tax rate and 168.8 million weighted average diluted shares outstanding.
Net income attributable to MKHL for the second quarter of fiscal 2016 was $193.1 million, or $1.01 per diluted share, based on a 28.9% tax rate and 191.5 million weighted average diluted shares outstanding.
At October 1, 2016, the Company operated 787 retail stores, including concessions, compared to 589 retail stores, including concessions, at the end of the same prior-year period.
The Company had 118 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 905 Michael Kors stores worldwide at the end of the second quarter of fiscal 2017. ■