Michael Kors shares up on stronger profit outlook

Michael Kors Holdings Ltd.'s shares jumped on Tuesday after the fashion designer's company raised its earnings guidance.

The company said Monday that it expects to earn 14 to 16 cents per share in its fiscal fourth quarter on an adjusted basis, up four cents per share from its prior guidance. Analysts polled by FactSet had forecast earnings of 13 cents per share.

Michael Kors also raised its full-year earnings outlook to 79 to 81 cents per share on an adjusted basis, up five cents from its previous forecast. Analysts were expecting 71 cents per share for the year.

The upgrade came as the clothing, shoes, jewelry and handbags maker said it is dealing with shipping problems as it transitioned to a new distribution center. That transition process is delaying deliveries to wholesale customers and retail stores and could cause it to miss its revenue forecast for the fourth quarter. The company expects to complete the move by April.

Michael Kors reports fiscal fourth-quarter results on June 12.

Wedbush Equity Research analyst Corinna Freedman said the company's distribution problems are not a misstep but likely a way for management to disclose the problem prior to the pricing of a possible stock offering. Freedman called it a "high class problem" as demand appears to have outpaced the company's ability to ship.

Michael Kors, which makes upscale clothing and accessories, went public in December.

Shares of the company rose $2.77, or 6.1 percent, to close at $48.09 amid a dip in the broader market.