Financial Comparison: Michael Kors Holdings Limited (KORS) & Carter’s (CRI)
Michael Kors Holdings Limited (NYSE: KORS) and Carter’s (NYSE:CRI) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.
Institutional and Insider Ownership
83.4% of Michael Kors Holdings Limited shares are held by institutional investors. Comparatively, 97.3% of Carter’s shares are held by institutional investors. 6.0% of Michael Kors Holdings Limited shares are held by insiders. Comparatively, 3.1% of Carter’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Michael Kors Holdings Limited and Carter’s’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Michael Kors Holdings Limited||$4.46 billion||1.53||$1.07 billion||$3.22||13.95|
|Carter’s||$3.26 billion||1.36||$494.84 million||$5.09||18.17|
Michael Kors Holdings Limited has higher revenue and earnings than Carter’s. Michael Kors Holdings Limited is trading at a lower price-to-earnings ratio than Carter’s, indicating that it is currently the more affordable of the two stocks.
This table compares Michael Kors Holdings Limited and Carter’s’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Michael Kors Holdings Limited||11.91%||40.26%||26.12%|
Carter’s pays an annual dividend of $1.48 per share and has a dividend yield of 1.6%. Michael Kors Holdings Limited does not pay a dividend. Carter’s pays out 29.1% of its earnings in the form of a dividend. Carter’s has raised its dividend for 3 consecutive years.
This is a breakdown of recent recommendations and price targets for Michael Kors Holdings Limited and Carter’s, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Michael Kors Holdings Limited||3||19||3||0||2.00|
Michael Kors Holdings Limited currently has a consensus price target of $41.77, indicating a potential downside of 7.01%. Carter’s has a consensus price target of $102.18, indicating a potential upside of 10.50%. Given Carter’s’ stronger consensus rating and higher probable upside, analysts clearly believe Carter’s is more favorable than Michael Kors Holdings Limited.
Michael Kors Holdings Limited Company Profile
Michael Kors Holdings Limited is a designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks MICHAEL KORS, MICHAEL MICHAEL KORS, and various other related trademarks and logos. The Company operates through three segments: retail, wholesale and licensing. The Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (the United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products, such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.
Carter’s Company Profile
Carter’s, Inc. (Carter’s) is a marketer of apparel for babies and young children in the United States and Canada. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh B’gosh (OshKosh). The Company operates through five segments: Carter’s Retail, Carter’s Wholesale, OshKosh Retail, OshKosh Wholesale and International. Its International segment includes company-operated retail stores and online Websites, wholesale operations, and royalty income from its international licensees. It markets products for consumers, and offer various product categories, including baby, sleepwear, play clothes, and related accessories. Its multi-channel international business model – retail stores, online and wholesale – enables it to reach a range of consumers around the world. As of December 31, 2016, its channels included approximately 18,000 wholesale locations, 792 stores in the United States, 164 stores in Canada, and its Canadian and the United States Websites.
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