May 2, 2013
Fifth & Pacific first quarter loss narrows as kate spade soars
May 2, 2013
Fifth & Pacific Cos Inc reported a smaller-than-expected first-quarter loss on Thursday, as sales of its upscale kate spade handbag and clothing brand soared and the company offered fewer discounts on its Lucky Brand items.
Sales of kate spade items, now the company's biggest brand, rose 63.1 percent to $141 million, while at Lucky Brand, known for its contemporary clothing, they were up 16.5 percent at $117 million.
Kate spade competes with the likes of Michael Kors Holdings Ltd and Coach Inc.
But Fifth & Pacific's other major brand, Juicy Couture, once its largest, continued to struggle, with sales down 10.7 percent at $98 million, dragging down overall gross margin 1.6 percentage points to 54.9 percent of sales.
Sources told Reuters in January that Fifth & Pacific may try to sell Juicy. Last year, the company hired a new chief executive for the brand, known for its trendy velour track suits, to try to improve performance.
The net loss narrowed to $52.2 million, or 44 cents per share, from $60.6 million, or 60 cents per share, a year earlier.
Excluding special items, the loss from continuing operations came to 16 cents per share. That was 2 cents better than analysts expected, according to Thomson Reuters I/B/E/S.
Companywide, sales were up 17.2 percent at $371.8 million, topping the $360.5 million that Wall Street expected, according to Thomson Reuters I/B/E/S.
Fifth & Pacific reaffirmed its forecast for earnings before interest, taxes, depreciation and amortization at $120 million to $150 million for the year.
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