American designer brand Michael Kors has announced a 3.2% drop in revenue and a 6.9% decrease in like-for-like sales for the third quarter, ending 31 December 2016, as reduced shopping centre footfall, currency headwinds and political uncertainty take their toll.
Total revenues fell 3.5% to $1.35bn (£1.08bn) with European revenues falling 7% to $256.7m (£205.3m) on a reported basis, in the third quarter, compared to the same period last year. Overall gross profit for the period was down 3.1% to $805.7m (£644.5m).
Like-for-like sales were also down, with wholesale net sales hit particularly hard, down 17.8% to $473.1m (£378.4m).
Figures for the nine months ending 31 December told a similar story, with total revenues down 2.4% to $3.43bn (£2.74bn) compared to $3.51bn (£2.81bn) the year before. Like-for-like sales were down 6.5% on a constant currency basis for the period, and gross profit was down 2.8% to $280.5m (£224.4m).
Company chairman and chief executive John D Idol blamed the results on global uncertainty and shifting shopper habits, and hinted that the next quarter would continue to prove challenging for the brand.
“We were disappointed with our North American and European comparable store sales performance during the quarter,” he said.
”We believe that headwinds in these markets will continue throughout the spring season as we face reduced traffic trends in shopping malls, currency fluctuation, uncertainty surrounding certain political changes in European countries and the Michael Kors implementation of our reduced promotional cadence in North America.”
Despite struggling in the European and US markets, the company saw strong growth in Asia, as the firm recently acquired previously licenced operations in Greater China and South Korea.
Sales for the third quarter were up 89.1% to $112.3m (£89.9m), up 87.4% to $280.5m (£224.3) on a reported basis for the nine months to 31 December 2016. Idol called the Asian market a “$1bn opportunity over the long term” for the brand.