- Prachi Singh |
Kate Spade & Company provided preliminary 2014 full-year results, as well as summary guidance for 2015. For the 2014 full year, the company expects to report a net sales increase of over 40 percent compared to last year, to a range of 1,130 million dollars to 1,140 million dollars. The company's 2015 guidance estimates net sales in the range of 1,200 million dollars to 1,275 million dollars, including a planned decrease compared to 2014 in excess of 125 million dollars. 2015 adjusted EBITDA is expected in the range of 185 million dollars to 200 million dollars.
On the expected financial results, President and Chief Operating Officer, George Carrara, said, “In 2014, we achieved impressive topline growth results both in the US and globally and remain on track for continued growth in fiscal 2015. We are driving these results and remaining focused on building quality of sale. We are early in our growth story – we have strong brand positioning and financial performance – and see significant opportunity ahead to maximize Kate Spade & Company's growth and expand profitability with continued margin expansion.”
The company also anticipates higher than expected direct-to-consumer comparable sales growth of 26 percent and a direct-to-consumer comparable sales increase of 23 percent and 22 percent excluding e-commerce, respectively; and for the fourth quarter, a direct-to-consumer comparable sales increase of 28 percent and 21 percent excluding e-commerce. Kate Spade expects adjusted EBITDA in a range of 145 million dollars to 150 million dollars, which includes losses of 29 million dollars from Kate Spade Saturday and the brick and mortar operations of Jack Spade, as well as inventory charges resulting from the planned initiatives.
The company has announced strategic initiatives that will further focus its business on the long-term growth of the Kate Spade New York brand. As part of this announcement, Kate Spade & Company is absorbing key elements of Kate Spade Saturday's success into Kate Spade New York and discontinuing Kate Spade Saturday as a standalone business. The company also announced a new business model for Jack Spade that will enable the brand to leverage the distribution network of its retail partners and expand its e-commerce platform.