Honing in further on those factors, KORS has become far less promotional over the past few quarters, which has provided a boost to its margins. For instance, this quarter, gross margin improved to 61.5% from 59.6%. More specifically, the improvement here was driven by its MK retail segment, as well as the inclusion of the higher margin Jimmy Choo business -- more on that below.
Another action management has taken is to close down under-performing retail locations, which has reduced wholesale supply, inventory levels, while simultaneously creating more of a "scarcity effect". These efforts have also had a positive impact on margins and profitability. In fact, its 3Q18 EPS of $1.77 (+8% y/y) was its highest since going public in 2012.
As noted above, KORS also made a significant acquisition acquiring Jimmy Choo for $1.35 billion last July. The addition of Jimmy Choo diversified its product portfolio, providing it with more exposure to the luxury footwear and accessories market. It also is moving the needle on the topline as management believes it can grow sales in this business to $1.0 billion. For this quarter, Jimmy Choo contributed $114.7 million in revenue, or, about 8% of total revenue. And as mentioned above, this is higher margin revenue.
Lastly, KORS is benefiting from some improving fundamentals in the retail sector here in the U.S. as the economy and wages improve, and, it continues to be a leading brand in the Asian market.
Still, with that said, KORS' still has some work to do. Its 3Q18 comps came in at -3.2% (expectation was for high single digit decline), following a 1.8% decline last quarter. Revenue growth is also moving in the right direction at +6% this quarter, compared to the year/year declines it saw throughout 2017. But, for a growth stock, mid-single digit growth leaves plenty of room for improvement.
But, overall, KORS Q3 results and its inline 4Q18 guidance (EPS of $0.50-$0.55, revs of $1.11-$1.13 billion) demonstrate that the turnaround is in full swing and that the business is indeed healthier and stronger that it has been in some time.