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3. dollar, heavy QE in Japan, and the (since February) depreciating Euro, international exposure, despite larger markets, will hurt revenues. Michael Kors, in 2013, only generated 6.1% of its sales from Europe and 1.3% in Japan. Ralph Lauren generates 37% of its revenues outside of North America, which makes it much more susceptible to currency shocks. Specifically, 21% of sales are from Europe, and 12% from Asia. Coach is even more susceptible to currency shocks, with 48% of sales coming from international regions, particularly China and Japan. Coach’s first quarter 2013 earnings showed a 40% increase in sales in China. However, currency exposures may give Coach a boost as the Yuan appreciates against the USD. Finally, Estee Lauder generates 37% of its sales from Europe, the Middle East, and Africa, and 21% from Asia. Similar to RL, EL may be hit hard with the depreciating Euro and appreciating USD. Thus, KORS, which has the least international exposure, will likely be less affected by currency shocks. RL and EL will suffer from the depreciating Euro, while COH may gain due to the appreciating Yuan.
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