Nov 5, 2015
Kate Spade's same-store sales beat estimates
Nov 5, 2015
Handbag and accessories maker Kate Spade & Co reported better-than-expected same-store sales for the third quarter, helped by higher demand in North America, sending its shares up 5 percent.
The company is focusing on luxury brand kate spade new york, investing in its online business and expanding into areas such as furniture to become a more lifestyle brand.
Sales in North America rose 18.5 percent in the third quarter, picking up from the 13 percent rise it reported in the second quarter. The region accounts for 82 percent of total sales.
Same-store sales, including online, rose 16 percent, beating the average analyst estimate of an 11.8 percent rise, according to research firm Consensus Metrix.
Kate Spade is Cowen and Co's "favorite handbag name". Analyst Oliver Chen said in a pre-earnings note that the company is best prepared to weather a tough sector thanks to its "elastic" expansion in categories such as home and children's, cut back on flash sales and tight distribution management.
The company's net sales rose 11 percent to $277.3 million in the quarter, from a year earlier.
Kate Spade reported net income of $2.3 million, or 2 cents per share, in the quarter ended Oct. 3, compared with a net loss of $9.1 million, or 7 cents per share, a year earlier.
Excluding items the company earned 6 cents per share.
Analysts had expected earnings of 4 cents per share on revenue of $280 million, according to Thomson Reuters I/B/E/S.
The company's shares, which closed at $19.74 on Wednesday, were at $20.50 in premarket trading.
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