New York—Fifth & Pacific, the company formerly known as Liz Claiborne Inc., reported Thursday that it narrowed its third quarter loss despite continued struggles with its Juicy Couture brand.
For the quarter ended Sept. 29, Fifth & Pacific posted a net loss of $18.8 million, or 17 cents a share, compared with a third quarter loss in 2011 of $214.6 million, or $2.27 a share, last year. Excluding discontinued businesses and other special items, the company had an adjusted loss of 5 cents a share compared with 4 cents a share a year ago.
Total revenue fell 4.2% to $364.6 million. However, net sales increased 6.6% on a comparable basis with the 2011 period excluding the $39 million decline in net sales associated with brands that were either sold or excited.
Analysts’ average consensus expected a loss of 6 cents a share on sale of $369.4 million.
Noting the company’s conference call earlier in October when it slashed its 2012 profit forecast because of a stalled turnaround at Juicy Couture, its largest brand by sales, and resulting price cutting to move merchandise, Fifth & Pacific reported “performance at Juicy Couture in the third quarter was well below our expectation.”
Net sales for Juicy Couture dropped 5.5% to $130 million, primarily driven by decreases in wholesale non-apparel, licensing and specialty retail, partially offset by increases in wholesale apparel and e-commerce.
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“At Juicy Couture, direct-to-consumer comparable sales were flat in the quarter and gross margins were down significantly,” said William McComb, ceo. “We remain focused on the execution of the action plan to stabilize the Juicy brand that we laid out on the pre-announcement call a few weeks ago.”
On the other hand, net sales for kate spade rose 35.1% to $102 million, driven by increases in outlet, specialty retail, e-commerce and wholesale apparel, partially offset by a decrease in wholesale non-apparel.
“Kate spade posted a 22% increase in direct-to-consumer comparable sales, driven by continued strong performance overall,” McComb noted. “We are also excited about the prospects for the recently announced Kate Spade Saturday lifestyle brand. Kate Spade Saturday is born from the core values of kate spade new york but will be targeted toward a younger consumer at an affordable pricepoint.”
Net sales for Lucky Brand increased 11% to $112 million, driven by increases in wholesale apparel and outlet, partially offset by decreases in wholesale non-apparel and specialty retail.
Noting that Lucky Brand posted direct-to-consumer comparable sales increased of 5%, McComb added, “Lucky continued to generate strong full price selling in the quarter which resulted in direct-to-consumer gross margin improvement of nearly 270 basis points compared to last year.”
At its Adelington Design Group & Other segment, net sales decreased 68.7% to $21 million, substantially all of which was related to the impact of exited businesses. The Adelington Design Group, a private brand jewelry design and development group, markets brands through department stores and serves JCPenney via exclusive supplier agreements for the Liz Claiborne and Monet jewelry lines and Kohl’s via an exclusive agreement for Dana Buchman jewelry.
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