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Michael Kors banks on jet-set comeback

May 29, 2013: 3:28 PM ET

Michael Kors is cashing in on a rebound in the luxury business as the jet-set starts to splurge again.

The high-end retailer reported earnings that blew past expectations early Wednesday as sales of bespoke handbags and flashy watches bounce back.

Shares of Michael Kors (KORS) rose about 3% in afternoon trading, despite a broad-selloff on Wall Street.

While the company offered cautious guidance, investors on StockTwits were still impressed with how strong sales have been.

$KORS SSS 63% in EU & 35% in US. they are not even in china or latin america yet. LOL. these are triple the growth rate of cloud tech stks

The luxury business has been booming recently, particularly in overseas markets.

Tiffany's (TIF) reported strong results Tuesday, helped by robust demand for jewelry in Japan. Coach (COH) said last month that global sales were up in the first quarter, thanks to a 40% rise in China.

Related: Tiffany not feeling blue: Stock up 20% this year

Some traders said the stock was held back Wednesday by losses in the broader market. Michael Kors shares have surged 130% since the Hong Kong-based company went public in 2011.

$KORS just picked a bad day to report earnings. If the market recovers, could pop tomorrow.

$KORS Nothing's changed. BEST retail name to own. Broad markets will do what it needs to do. Upside potential of this gem remains intact.

The company's founder and namesake is perhaps best known as a former judge on reality fashion show Project Runway. But the brand seems to resonate with consumers who aspire to the finer things in life, like private jets.

The company's management mentioned the phrase jet-set at least eight times during a conference call on Wednesday, notes one trader.

Beauty is $KORS doesn't actually sell to the jetset - its found a great niche selling affordable stuff to those who aspire to be the jetset

That's in contrast to Coach, another maker of high-end leather goods, which is more yacht-set than jet-set. But isn't all this talk about the jet-set kind of annoying?

So $KORS is the cool new brand in a niche Coach never exploited. Trouble is one day that one-dimensional 'jetset' message will become tired.

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Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

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