New York—While Fifth & Pacific today reported that Superstorm Sandy and Juicy Couture’s continued slump cut into its fourth quarter sales, the company still managed to exceed analysts’ estimates for its 2012 sales.
The company, formerly known as Liz Claiborne Inc., said its 2012 revenue was $1.51 billion, ahead of the $1.5 billion that analysts’ average expected.
Its earnings will likely come in at the lower end of the company’s forecast: fourth quarter adjusted EBITDA would be between $63 million and $68 million, resulting in a full-year 2012 expectation of $100 million to $105 million—“up approximately 25% compared to full year 2011 on a comparable basis.”
The company’s kate spade new york and Lucky Brands performed well during the quarter but all its brands had a $3 million negative impact due to Hurricane Sandy which hit the Northeast in late October.
“Overall for the company, 2012 was a year of progress marked by industry leading growth at kate spade, and a significant improvement in performance at Lucky Brand—tempered however by a miss in North America caused by merchandising and other issues at Juicy Couture that we believe are now being corrected under Paul Blum’s direction,” said William L. McComb, Fifth & Pacific’s chief executive. Blum, previously chief executive at Kenneth Cole Productions, became chief executive at Juicy Couture two months ago as part of a turnaround effort.
Juicy Couture Headed for Turnaround
While kate spade new york posted a 27% jump in its comparable sales and Lucky Brand was up 3%, Juicy Couture’s comp store sales were down 2%.
McComb said Juicy Couture posted disappointing “direct to consumer comparable sales and gross margins in November and December” as the company tightly managed its inventory through “very aggressive markdowns in response to sales softness.”
But McComb said he believes the fixes are in place for Juicy and that the brand will see a rebound this year.
“I am optimistic about delivering sizeable growth in 2013 at kate spade and Lucky Brand, while recognizing that the fixes at Juicy Couture will come late in 2013 and into 2014,” McComb said. Comp sales are expected to increase by a mid- to high-single digit percentage for Lucky Brand and a low-teens increase at kate spade new york. Juicy Couture, on the other hand, is expected to have a comp sales range from slightly down to unchanged.
Fifth & Pacific will report its full fourth quarter and 2012 results on Feb. 21.
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