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The United States abstained from the Dec. 23 vote, allowing the 15-member Security Council to adopt the resolution with 14 votes in favor. Israel and U.S. President-elect Donald Trump had called for Washington to wield its veto. Israel's mission to the United Nations said funding would be cut to U.N. bodies it described as "anti-Israel," including the Committee on the Exercise of the Inalienable Rights of the Palestinian People and the Division for Palestinian Rights. "It is unreasonable for Israel to fund bodies that operate against us at the U.N.," Israeli U.N. Ambassador Danny Danon said in a statement. "The U.N. must end the absurd reality in which it supports bodies whose sole intent is to spread incitement and anti-Israel propaganda." The Israeli mission said it would move ahead with further initiatives aimed at ending anti-Israel activities at the United Nations after Trump takes office on Jan.
In terms of its digital flagships, Kors North American digital flagships continued to perform well during the quarter with strong double-digit comp growth. I expect the momentum in its digital flagships to continue as the company further invests in this growing channel. In Europe, while traffic continues to decline in certain major markets Korsisinvesting heavily in its internationaldigital flagship strategy to ensure it'spositioned to capture future growth opportunities in the region. The companyhaslaunched itsdigital flagship businesses in the U.K., Germany, France, Switzerland, Spain and Italy. While it's still too early to measure the impact of the strategy the company now has the platforms in place on which it can build. Kors is planning to have e-commerce capabilities in 16 additional European countries in Spring of 2017. One area that hasn't been performing well for Kor's is the company's wholesale segment with overall revenues declining 18%.The biggest decline was in Asia, down 43% and the Americas, down 22%, but the bright light wasEurope, up 3%. What seems to be overlooked is that the company has been strategically reducing itssell-in to department stores in order to protect itsbrand and margins. I expect we'll continue to seefurther reductions ininventory flow and promotional activity in the wholesale segment.In Asia, the decline maybeattributed to the shift of Kors China and South Korean businesses to its company-owned retail segment.In Europe, the 3% increase, which is lower than historical trends is likelybeing negatively impacted by a mix shift towards crossbodies and small leather goods, which carry a lower AUR. Let's Run The Numbers A quick look at the company's quarterly income statement (below) shows that while there was a 4% decline in revenue from $1.13 billion inQ2 2016 to $1.09 billion in Q2 2017, the company's gross margins remain very strong at around 60%. Operating margins have come down slightly but its important to rememberthatthere's been a lot of heavy lifting on both SG&A andcapital expenditure this year with its projects, thecompany's distribution facilities, corporate offices, and digital flagships.
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