kate spade new york

Fifth & Pacific Q2 Loss Narrows But Still Misses Estimates

In Industry News, What's New by Jeff PrineLeave a Comment

kate spade new yorkNew York—Fifth & Pacific Cos Inc. today reported a narrowed second quarter loss helped by a double-digit sales increase at Kate Spade offsetting continued sluggish sales at Juicy Couture.

For the quarter ended June 29, the company posted a net loss of $43.1 million, or 36 cents a share, compared to a loss of $52.1 million, or 48 cents a share, a year earlier. The adjusted loss from continuing operations was 12 cents a share, worse than the 10 cents analysts expected

The company had revenue of $382 million for the quarter, compared to the consensus estimate of $392.70 million.

Net revenue increased 13.4% to $382 million, missing analysts’ $392.7 million.

According to William McComb, chief executive, sales at the kate spade new york brand “posted a 65% increase in total net sales, driven by strong performance in all channels of its business and a 27% increase in direct-to-consumer comparable sales. Excluding the impact of $22 million in net sales associated with Kate Spade Japan, net sales for Kate Spade increased 43%.”

However, sales at Juicy Couture fell again, declining 10.7%. At Lucky Brand, sales were down 2%.

McComb said gross margin rate was down compared to the second quarter of 2012, “although we saw some improvement in trend compared to the first quarter Total net sales for the Juicy Couture were down in the quarter and direct-to-consumer comparable sales decreased (4%). We continue to believe that the brand is nearing a turning point and has a bright future under the direction of Paul Blum and his team.”

Reuters reported that sources revealed Fifth & Pacific is shopping Lucky and Juicy and hired investment banks Centerview Partners and Perella Weinberg earlier this year.

McComb appeared to allude to a possible sale when he said in the earnings statement that the company is looking for “the best path forward with our brand portfolio to maximize shareholder value.”

 

 

 

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