MICHAEL KORS JOHN IDOL, CHAIRMAN & CEO TOM EDWARDS, CFO & COO

Transcription

1 MICHAEL KORS JOHN IDOL, CHAIRMAN & CEO TOM EDWARDS, CFO & COO

2 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous uncertainties and factors relating to the Company s operations and business environment, all of which are difficult to predict and many of which are beyond the Company s control. Forward-looking statements include information concerning the Company s possible or assumed future results of operations, including descriptions of its business strategy. These statements often include words such as may, will, should, believe, expect, seek, anticipate, intend, plan, estimate or similar expressions. The forward-looking statements contained in this press release are based on assumptions that the Company has made in light of management s experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors that it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forwardlooking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forwardlooking statements. These factors include, but are not limited to, the Company s ability to successfully execute its business and transformation strategies, the Company s ability to achieve the anticipated cost savings, efficiencies and other benefits related to its retail fleet optimization, the Company s ability to control costs, the seasonal and quarterly fluctuations in the Company s sales or operating results and such other risks factors that are more fully discussed in the Risk Factors section and elsewhere in the Company s Annual Report on Form 10-K for the fiscal year ended April 1, 2017(File No ), filed on May 31, 2017 with the U.S. Securities and Exchange Commission.

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4 UNIQUE BRAND POSITIONING JET SET LIFESTYLE A FAST-PACED, 24/7 LIFE FILLED WITH GLAMOUR, TRAVEL AND ADVENTURE.

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10 THE MICHAEL KORS BRANDS 10

11 A GLAMOROUS, SOPHISTICATED COLLECTION FOR THE CONSUMMATE LUXURY JET SETTER.

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15 SHE IS SUBTLY SEXY, IMPOSSIBLY POLISHED. AND ABOVE ALL, GLAMOROUS 24/7.

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19 HE IS CONFIDENT, CONNECTED, ADVENTUROUS, AND HAS EFFORTLESS STYLE WITH A MODERN EDGE.

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23 WHAT MAKES MICHAEL KORS GREAT TODAY

24 STRENGTH 1 POWERFUL ICONIC BRAND WITH DEEP ROOTS IN FASHION

25 STRENGTH 2 PRODUCT & TREND LEADERSHIP ACCESSORIES FOOTWEAR READY TO WEAR MENS SPORTSWEAR MENS LEATHER GOODS WATCHES & SMARTWATCHES

26 STRENGTH 3 GLOBAL STORE FLEET 960 GLOBAL STORE NETWORK

27 STRENGTH 4 DIGITAL INNOVATION

28 STRENGTH 5 STRONG BALANCE SHEET & CASH GENERATION

29 TOTAL MKHL REVENUE USD in Millions $4,371 $4,712 $4,494 $3,311 $2,182 $1,302 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A

30 USD in Millions TOTAL AMERICAS REVENUE Licensing Wholesale Retail $1, $1, $2, ,336 1,319 $3,419 $3, $3, ,663 1,629 1,341 1,656 1,779 1,714 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A

31 USD in Millions TOTAL EMEA REVENUE Licensing Wholesale Retail $109 $221 $ $ $ $944 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A 60

32 TOTAL APAC REVENUE USD in Millions China Asia $409 $212 $215 $10 $22 $39 $68 $197 FY 2012A FY 2013A FY 2014A FY 2015A FY 2016A FY 2017A

33 RUNWAY 2020 MICHAEL KORS GLOBAL COMPANY- WIDE VISION FOR THE FUTURE, ELEVATING THE BRAND FOR THE MODERN DAY JET SETTER

34 RUNWAY2020 VISION PRODUCT & DESIGN MICHAEL KORS FASHION LEADERSHIP PRODUCT INNOVATION REBALANCE PRODUCT MIX PRODUCT PERSONALIZATION BRAND COMMUNICATION MICHAEL S VOICE RUNWAY LEADERSHIP JET SET LIFESTYLE STYLE EXPERIENCE CUSTOMER EXPERIENCE DIGITAL FLAGSHIPS FLAGSHIP MODEL NEW FLEET CONCEPT LUXURY SERVICE LOYALTY

35 RUNWAY2020 PRODUCT MICHAEL KORS FASHION LEADERSHIP PRODUCT INNOVATION & NOVELTY DIVERSIFY PRODUCT MIX BANCROFT COLLECTION

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37 BY NEXT YEAR, PENETRATION OF NEW COLLECTIONS IN ACCESSORIES TO GROW 3X 70% 65% 60% 50% 40% 37% 30% 20% 20% 10% 0% SPRING 2017 SEASON FALL 2017 SEASON SPRING 2018 SEASON

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40 FASHION & TECHNOLOGY ARE MERGING

41 INTRODUCING SOFIE

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44 GRAYSON (CALIBRE) VIDEO

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46 DIVERSIFY THE PRODUCT MIX FY17 FY20 Men's 3% Watches 5% Other 2% Watches 4% Other 1% Footwear 11% Women's RTW 10% Handbags & SLG's 70% Footwear 13% Men's 8% Women's RTW 12% Handbags & SLG's 62% 46

47 RUNWAY2020 BRAND COMMUNICATION MICHAEL S VOICE 360 MARKETING STRATEGY DIGITAL FLAGSHIPS

48 REPEAT MICHAEL KORS IS A 360 MARKETING LEADER CUSTOMER-CENTRIC IN-STORE EXPERIENCE DIGITAL FLAGSHIP BUZZ NATIONAL ADVERTISING CATALOG CONTINUOUSLY ENGAGED ACROSS ALL CHANNELS VISUAL MERCHANDISING S OUTDOOR TRAFFIC SOCIAL MEDIA DIGITAL BANNERS PAID SEARCH PURCHASE GLOBAL PR VIPS GLOBAL EVENTS

49 MICHAEL KORS IS RED CARPET GLAMOUR 49 KATE HUDSON MING XI ROSIE HUNTINGTON WHITELEY MIRANDA KERR YANG MI

50 MICHAEL KORS IS A-LIST OLIVIA WILDE HEIDI KLUM VIOLA DAVIS LILY ALDRIDGE MICHELLE OBAMA CATHERINE DUCHESS OF CAMBRIDGE JENNIFER LOPEZ

51 MARKETING CELEBRITIES CHINA TOP INFLUENCERS/CELEBRITIES (WEIBO/WECHAT) YANG MI, 72M FOLLOWERS

52 STRONG GLOBAL BRAND AWARENESS US 92% CANADA 87% UK 86% GERMANY 79% SOUTH KOREA 68% FRANCE 58% CHINA 54% JAPAN 46% *2016 BRAND AWARENESS STUDY

53 SOCIAL LEADERSHIP With a global audience 1 of 35.8 million ENGAGED fans (+25% vs. LY) LINE JAPANESE SOCIAL PLATFORM 17M 3.5M 10M 604K 52K 3.7M

54 RUNWAY2020 CUSTOMER EXPERIENCE ELEVATE FLAGSHIPS RIGHT SIZE & FLEET OPTIMIZATION RENOVATE STORES GLOBALLY

55 REGENT STREET, LONDON

56 REGENT STREET, LONDON

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59 REGENT STREET, LONDON

60 REGENT STREET, LONDON

61 REGENT STREET, LONDON

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63 REGENT STREET, LONDON

64 REGENT STREET, LONDON

65 MADISON AVENUE SPRING 17 COLLECTION, NEW YORK WINDOWS

66 MADISON AVENUE MOTHER S DAY, NEW YORK

67 LOYALTY, STYLING & SERVICE L O YALT Y P R O G R AM : K O R S V I P FAS H I O N / S T YLE I N S I D ER AC C E S S S E RV I CE K O R S V IP AP P S T YLE CHAT B O O K AP P O I N T M E N T S V I P S E RV ICES & REWAR D S L U X U RY S E RV ICE I N STO R E S AM E D AY D E L I V ERY & OMNI S E RV I CES 67

68 STORE FLEET OPTIMIZATION MODERNIZE 100 STORES RIGHT SIZE GLOBAL FLEET CLOSE STORES OVER TWO YEAR PERIOD INCREASE PROFITABILITY; ULTIMATELY ANNUALIZED PICK UP OF $60M 68

69 WHOLESALE STRATEGY ENHANCE THE CONSUMER EXPERIENCE THROUGH A MORE ELEVATED PRODUCT AND SHOP DESIGN RENOVATE FLAGSHIP SHOPS WITH NEW STORE DESIGN CONCEPT

70 SOGO, HONG KONG

71 SOGO, HONG KONG

72 RUNWAY 2020 FINANCIAL PLAN

73 RUNWAY2020 EXPECTED TO DRIVE IMPROVED FINANCIAL PERFORMANCE PRODUCT & DESIGN MICHAEL KORS FASHION LEADERSHIP PRODUCT INNOVATION REBALANCE PRODUCT MIX CUSTOMIZATION COLLABORATIONS BRAND COMMUNICATION MICHAEL S VOICE RUNWAY JET SET LIFESTYLE STYLE EXPERIENCE CUSTOMER EXPERIENCE DIGITAL FLAGSHIPS FLAGSHIP MODEL NEW FLEET CONCEPT LUXURY SERVICE LOYALTY RETURN TO REVENUE GROWTH PRODUCT INNOVATION AND EXPANSION STABILIZE THE BASE GLOBAL EXPANSION IMPROVING OPERATING MARGIN SEGMENT MIX GEOGRAPHIC MIX BETTER MANAGE PROMOTIONS & MARKDOWNS STRONG FREE CASH FLOW EBITDA GROWTH WORKING CAPITAL MANAGEMENT

74 FINANCIAL OUTLOOK FY 2018 FY 2019 FY 2020 REVENUE APPROXIMATELY $4.25B LOW SINGLE DIGIT GROWTH LOW SINGLE DIGIT GROWTH COMPARABLE SALES HIGH SINGLE DIGIT DECLINE EVEN POSITIVE GROSS MARGIN APPROXIMATELY 60% STABLE IMPROVING OPERATING EXPENSE PERCENT* OPERATING MARGIN* APPROXIMATELY 44% STABLE STABLE APPROXIMATELY 16% STABLE IMPROVING NET INCOME* DECLINING IN LINE WITH SALES GROWING EPS* $ $3.67 LOW TO MID SINGLE DIGIT GROWTH MID TO HIGH SINGLE DIGIT GROWTH CAP EX APPROXIMATELY $200M $200M - $250M $200M - $250M *US GAAP RESULTS ADJUSTED FOR NON-RECURRING & SPECIAL ITEMS

75 EFFICIENT CAPITAL DEPLOYMENT BUILD ON OUR STRONG FINANCIAL FOUNDATION: STRONG FREE CASH FLOW STRONG BALANCE SHEET CAPITAL ALLOCATION PRIORITIES: INVEST IN THE BUSINESS RETURN EXCESS CASH TO SHAREHOLDERS OPPORTUNISTIC M&A

76 Q & A