Michael Kors Holdings Ltd gave a bleak full-year forecast and said it would shut more than 100 full-price retail stores in the next two years as the upmarket fashion retailer struggles to turn around its brand.
Shares of the company, which also swung to a fourth-quarter loss, slumped more than 10 percent to $32.69, their lowest in more than five years.
Michael Kors, like other brick-and-mortar retailers, has been facing slowing sales as more customers shop online and spend less on apparel.
The once hugely popular brand posted double-digit sales growth until 2014, helped by the runaway success of its $300 bags. But then, its efforts to rapidly expand in North America - in a bid to sustain sales growth - made its handbags too commonplace for fashion-conscious women and consequently led to declining sales.
Kors shares have fallen nearly 16 percent this year.
The company said on Wednesday it expected revenue of $4.25 billion for fiscal year 2018 and also forecast a high single-digit drop in same-store sales.
Analysts on average had estimated revenue of $4.37 billion, according to Thomson Reuters I/B/E/S.
For the fourth quarter ended April 1, total sales fell 11.2 percent to $1.06 billion. Analysts had expected $1.05 billion.
Comparable-store sales fell 14.1 percent in the quarter, below analysts' estimate of 13.4 percent, according to research firm Consensus Metrix.
Net loss attributable to Michael Kors was $26.8 million, or 17 cents per share, in the latest quarter, compared with net income of $177 million, or 98 cents per share, a year earlier.
The company also booked non-cash impairment charges of $193.8 million related to its underperforming full-price retail stores.
Excluding certain items, the company earned 73 cents per share, while analysts had expected 70 cents per share.
Michael Kors also said it would buy back $1 billion of shares.
REUTERS