(Reuters) -Fashion company Michael Kors outlet Holdings Ltd (KORS.N) raised its full-year forecast after strong sales of its luxury items such as handbags and watches over the holiday period helped to win market share from rival Coach Inc (COH.N), sending its shares to a record high Michael Kors Bags. Shares of the company, named after its New York-born founder, rose as much as 13 percent to $64.80 on the New York Stock Exchange on Tuesday. The stock has more than tripled since Michael Kors went public in December 2011. "Michael Kors is bringing more excitement to the category where people are buying new handbags, instead of other items like clothing," Citi analyst Oliver Chen told Reuters. Designer Michael Kors launched his brand 30 years ago as a luxury sportswear house. The company now makes pyramid-studded Saffiano leather handbags, watches and apparel worn by first lady Michelle Obama and celebrities including Jennifer Lopez. Michael Kors raised $944 million in its initial public offering just over a year ago, one of the biggest ever listings by a U.S citation. fashion company. The company now has a market capitalization of $12.6 billion. Kors, well-known for his work as a judge on the long-running television fashion show "Project Runway", held a 3.7 percent stake in the company as of December 31. At today's share price, this stake would be worth around $466 million. The company, which reported third-quarter results that comfortably beat Wall Street estimates, said the addition of new stores and the conversion of department store premises into branded "shop-in-shops" had drawn in more customers. A shop-in-shop is a mini-store within a larger department store that houses similar products. In total, there were 388 Michael Kors stores worldwide at the end of the third quarter, the company said. "It's the big opportunity for Michael Kors, growing stores, as that means a lot of runway for them to grow for at least two or three more years," said Chen. Comparable-store sales rose 41 percent in North America in the October-December holiday quarter, while larger rival Coach said last month same-store sales fell 2 percent in North America, only its third decrease in 11 years. "They (Michael Kors) are gaining market share from Coach, but it's not only Coach - it's also the little guys that are getting squeezed in a highly competitive market," Morningstar analyst Paul Swinand said. POPULAR ACCESSORIES Chen, the Citi analyst, said that Michael Kors' popularity as a brand allowed the company to be more flexible in pricing than its rivals. He said its focus on smaller handbags and accessories also presented a particular challenge to Coach. Michael Kors Chief Executive John Idol said there was strong demand for luxury items in the third quarter from Europe and North America. He said he expected the global luxury market to keep growing at the same pace, without specifying a timeframe. The Luxury Goods Worldwide Market Study of 2012 estimated that the global luxury goods market would grow to between $314 billion and $327 billion in 2015 from $251 billion in 2011. The lure of a new brand in the market has also driven growth for Michael Kors in the relatively weak European market. Comparable-store sales in Europe rose 58 percent in the third quarter, the company said. "Their fashion angle is quite attractive and I feel Europeans respond to the fashion credibility that Michael Kors has," Chen said. Chief Executive Idol said he expected Europe to be a $500 million market in which the company would open 100 stores. Kors raised its full-year earnings-per-share estimate to a range of $1.80 to $1.82 from its previous range of $1.48 to $1.50. It also raised its full-year revenue forecast to about $2.1 billion from a range of $1.86 billion to $1.96 billion. Analysts had estimated full-year earnings of $1.57 per share on revenue of $2.01 billion, according to Thomson Reuters I/B/E/S. The largest shareholder in Michael Kors, with a stake of about 16 percent, is Hong Kong-based Sportswear Holdings Ltd, led by Silas Chou and Lawrence Stroll, who have had a hand in developing fashion brands including Tommy Hilfiger and Pepe Jeans. Michael Kors said it expected a low- to mid-20s percentage increase in same-store sales in the current quarter. Net income rose fourfold to $130.0 million, or 64 cents per share, from $32.0 million, or 20 cents per share, a year earlier. Analysts had expected 41 cents per share. Revenue jumped 70 percent to $636.8 million in the quarter ended December, compared with $540.3 million forecast by analysts. "I think its sales trends will continue," said Swinand of Morningstar. "It is going to have momentum as newer people are more excited about it." (Reporting By Siddharth Cavale in Bangalore and Martinne Geller in New York; Editing by Lisa Von Ahn, Robin Paxton and Sreejiraj Eluvangal) here