Michael Kors warns of margin pressure as it pushes European expansion

Michael Kors Holdings Ltd's global expansion is fuelling sales for the luxury-goods company, even as the push threatens to squeeze profit margins.

The company has reported a 54 per cent jump in revenue for the quarter to March 29th, helped by store openings and strong demand for its self-described “jet-set” affordable luxury goods.

Gross margin – earnings left after subtracting the cost of goods – will be “slightly lower” in the current fiscal quarter and year and operating costs will rise a bit, executives said.

Customers in the US and Europe drove total revenue up to $917.5 million (€675 million) last quarter. The company ended the period with 405 retail stores, up from 304 a year earlier. Revenue rose 43 per cent in North America and more than doubled in Europe, Michael Kors said. – (Bloomberg)