Kate Spade Q2 sales increase 5.7 percent

Kate Spade & Company’s net sales for the second quarter of 2015, excluding sales for wind-down operations, were 273 million dollars, an increase of 46 million dollars, or 20.1 percent compared to the second quarter of 2014. Reported net sales for the quarter were 281 million dollars, an increase of 15 million dollars, or 5.7 percent, from the comparable 2014 period.

“Our second quarter results demonstrate our focus on building a diverse business model that will drive sustainable, long-term growth. Our strategy is centered on key factors that differentiate Kate Spade & Company – including our lifestyle brand vision, partnered approach to expansion and efforts to build quality of sale. Our success with new product introductions shows that we are resonating with our existing customers, as well as attracting new customers to our brand across our four category pillars. We are driving clear results, including direct-to-consumer comparable sales growth of 10 percent versus last year,” said Craig A. Leavitt, Chief Executive Officer of Kate Spade & Company.

For the second on a GAAP basis, income from continuing operations was 9 million dollars, or 0.07 dollar per share, compared to a loss from continuing operations of 14 million dollars, or 0.11 dollar per share, for the second quarter of 2014. Adjusted diluted earnings per share from continuing operations in the second quarter were 0.08 dollar, compared to 0.05 dollars per share, same quarter of 2014.

For the first half of 2015, the company recorded a loss from continuing operations of 44 million dollars, or 0.35 dollar per share, compared to a loss from continuing operations for the first half of 2014 of 52 million dollars, or 0.42 dollar per share. Reported net sales for the first half of 2015 were 536 million dollars, an increase of 47 million dollars, or 9.6 percent, from the comparable 2014 period. Adjusted diluted earnings per share from continuing operations in the first half were 0.10 dollar compared to 0.01 dollar in the first half of 2014. Net sales excluding sales for wind-down operations, were 512 million dollars, an increase of 99 million dollars, or 23.8 percent. Adjusted EBITDA, excluding the previously announced wind-down operations in 2015 was 69 million dollars.

Kate Spade North America net sales for the second quarter, excluding sales for wind-down operations, were 232 million dollars, an increase of 42 million dollars, or 22.4 percent. Reported net sales for the quarter were 236 million dollars, an increase of 27 million dollars, or 13.1 percent. The company ended the quarter with 97 specialty retail stores and 62 outlet stores, reflecting the net addition over the last 12 months of 15 specialty retail stores and 11 outlet stores.

Kate Spade International net sales for the second quarter of 2015, excluding sales for wind-down operations, were 36 million dollars, an increase of 5 million dollars, or 16.1 percent, adjusting for the impact of the conversion of the Hong Kong, Macau and Taiwan territories to a joint venture, changes in foreign currency exchange rates and wind-down operations. Reported net sales for the second quarter were 41 million dollars, a decrease of 17.3 percent, from the comparable 2014 period. The company ended the quarter with 26 kate spade new york specialty retail stores, 52 concessions and 13 outlet stores, reflecting the net addition over the last 12 months of 5 concessions and 3 outlet stores and a net reduction of 4 specialty stores.

Adelington Design Group net sales for the second quarter declined 28.3 percent adjusting for wind-down operations in 2014. Reported net sales decreased 44.3 percent, principally reflecting decreases in the Trifari and Lizwear brands, partially offset by an increase in the Monet. Adelington Design Group Segment Adjusted EBITDA excluding wind-down operations was flat in the second quarter of 2015.