New York—Fifth & Pacific Cos. Inc., owner of kate spade new york and Lucky Brand, reported today that its fourth quarter net income plunged 75% due to tough comparisons with the prior year when it benefitted from selling off some of its brands.
For the quarter ended Dec. 29, the former Liz Claiborne company posted earnings of $57 million, or 47 cents a share, compared to $229.2 million, or $1.91 a share, in fourth quarter 2011.
Included in the most recent quarter’s figures was a $40.1 million gain on acquisition of kate spade Japan. The year ago quarter included a $271.4 million gain on the sale of its Liz Claiborne, Monet and Dana Buchman trademarks.
Excluding those and other one-time items, Fifth & Pacific said it posted an adjusted profit from continuing operations of 12 cents a share, up from an adjusted 10 cents per share in the year-ago quarter.
Net revenue increased 8.8% percent to $486.5 million from $447.1 million. That narrowly missed analysts’ average estimate expecting a profit of 17 cents a share on sales of $488.9 million.
‘Correcting Underlying Issues at Juicy Couture’
On a comparable basis, the company said total sales were up 13.8% with direct-to-consumer sales at Lucky Brand up 3% and up 27% at kate spade new york. Juicy Couture’s comp sales were down 2%.
Gross profit as a percentage of net sales increased to 55.5% compared to 53.8% in the comparable 2011 period, “primarily reflecting a higher percentage of direct-to-consumer sales, which run at a higher gross profit rate than the company average and gross margin expansion in our kate spade and Lucky Brand segments, partially offset by a decreased gross margin in our Juicy Couture segment.”
“2012 brought industry leading growth at kate spade and a significant improvement in performance at Lucky Brand,” said William McComb, chief executive. “While progress in these two businesses was tempered by a miss in North America at Juicy Couture, we are optimistic that we are correcting the underlying issues at Juicy under the direction of its new CEO, Paul Blum.”
For its full fiscal year 2012, Fifth & Pacific posted a loss of $74.5 million, or 68 cents a share, compared with a loss of $171.7 million, or $1.35 a share, for all of 2011. Total revenue fell to $1.51 billion from $1.52 billion.
Fifth & Pacific reiterated its forecast for adjusted earnings of $120 million to $150 million in 2013.
Earlier this month, Reuters reported a rumor that Fifth & Pacific was considering selling off Juicy Couture, or maybe even Lucky Brand.