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Headquartered in New York, Kate Spade & Company is a high-end handbag and apparel maker. They operate principally under two global, multichannel lifestyle brands: kate spade new york and Jack Spade New York.
The retailer also owns Adelington Design Group, a private brand jewelry group. They were earlier a part of Fifth & Pacific, formerly been known as Liz Claiborne.
The company has been exploring a sale, under pressure from an activist stakeholder.
Weak Results Lead to Falling Estimates
Net sales for the first quarter of 2017 were $271 million, down 1.2% year-over-year. Adjusted earnings were $0.01 per share, down from $0.05 reported a year ago and significantly short of the Zacks Consensus Estimate of $0.08.
While e-commerce sales grew by double digits, brick and mortar sales were soft.
Shares plunged 6% after the report.
Estimates have also plunged after the report. Zacks Consensus Estimates for the current and the next year have fallen to $0.76 per share and $0.93 per share from $0.89 and $ 1.09 respectively before the results.
The Bottom Line
As the company is currently exploring strategic options, its future remains somewhat uncertain. Poor earnings report has reduced the chances of the company getting an attractive deal from potential buyers.
Additionally, Zacks Industry Rank of 246 of 265 (Bottom 7%) and Sector Rank of 16 out of 16, suggests potential underperformance in the short to medium term.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>
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Bear of the Day: Kate Spade (KATE)
Headquartered in New York, Kate Spade & Company is a high-end handbag and apparel maker. They operate principally under two global, multichannel lifestyle brands: kate spade new york and Jack Spade New York.
The retailer also owns Adelington Design Group, a private brand jewelry group. They were earlier a part of Fifth & Pacific, formerly been known as Liz Claiborne.
The company has been exploring a sale, under pressure from an activist stakeholder.
Weak Results Lead to Falling Estimates
Net sales for the first quarter of 2017 were $271 million, down 1.2% year-over-year. Adjusted earnings were $0.01 per share, down from $0.05 reported a year ago and significantly short of the Zacks Consensus Estimate of $0.08.
While e-commerce sales grew by double digits, brick and mortar sales were soft.
Shares plunged 6% after the report.
Estimates have also plunged after the report. Zacks Consensus Estimates for the current and the next year have fallen to $0.76 per share and $0.93 per share from $0.89 and $ 1.09 respectively before the results.
The Bottom Line
As the company is currently exploring strategic options, its future remains somewhat uncertain. Poor earnings report has reduced the chances of the company getting an attractive deal from potential buyers.
Additionally, Zacks Industry Rank of 246 of 265 (Bottom 7%) and Sector Rank of 16 out of 16, suggests potential underperformance in the short to medium term.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>