Retail

What to Look for in Kate Spade Earnings

Chris Lange

Published: May 3, 2016 12:55 pm

Last Updated: January 13, 2020 9:55 am

Kate Spade & Co. (NYSE: KATE) is scheduled to report its first-quarter financial results before the markets open on Wednesday. The consensus estimates from Thomson Reuters are calling for $0.05 in earnings per share (EPS) on $270.97 million in revenue. In the same period of last year, the company posted EPS of $0.03 and $239.63 million in revenue.

In the fourth quarter, the company reported North American net sales totaled $371 million, an increase of $45 million, or 13.6%, from the comparable 2014 period. This segment also ended the last quarter with 104 specialty retail stores and 64 outlet stores, reflecting the net addition over the past 12 months of 11 specialty retail stores and seven outlet stores.

For the international segment, Kate Spade said fourth-quarter sales of totaled $52 million, a decrease of $8 million, or 13.3%, from the comparable 2014 period.  The international segment ended the quarter with 22 Kate Spade New York specialty retail stores, 52 concessions and 13 outlet stores, reflecting the net reduction over the past 12 months of 10 specialty retail stores and one outlet store.

Since this last earnings report, the company has been on a tear, with the stock up about 28%, and even outperforming the broad markets in 2016 with the stock up about 43% year to date. However, over the past 52 weeks the stock is actually down over 20%.

A few analysts weighed in on Kate Spade prior to the release of the earnings report:

• Cowen reiterated an Outperform rating.
• Mizuho has a Buy rating with a $30 price target.
• Citigroup reiterated a Buy rating with a $32 price target.
• Buckingham Research initiated coverage with a Buy rating and a $31 price target.

Shares of Kate Spade were trading down 0.8% at $25.38 on Tuesday, with a consensus analyst price target of $28.13 and a 52-week trading range of $15.10 to $33.50.