Kate Spade net sales in Q1 rise 33.5 percent

REPORT_ Kate Spade & Company, for the first quarter of 2014 reported net sales for the first quarter of 2014,

which includes the continuing operations of Juicy Couture and excludes Lucky Brand, were 328 million dollars, an increase of 82 million dollars, or 33.5 percent, from the comparable 2013 period. Adjusted loss per share from continuing operations for the first quarter of 2014 was 0.06 dollars, compared to 0.16 dollars for the first quarter of 2013.

On a GAAP basis, loss from continuing operations, which includes the continuing operations of the Juicy Couture Brand and excludes Lucky Brand reported was 55 million dollars, or 0.44 dollars per share, compared to a loss from continuing operations of 40 million dollars, or 0.33 dollars per share, for the first quarter of 2013. Net sales on a comparable basis that excludes Juicy Couture and Lucky Brand were 224 million dollars in first quarter of 2014, an increase of 67 million dollars, or 42.9 percent, from the comparable 2013 period.

On the first quarter financial development, Craig A. Leavitt, Chief Executive Officer of Kate Spade & Company, said, “Overall, Kate Spade & Company's performance in the first quarter of 2014 continued to be very strong. Direct to consumer growth was fueled by both door expansion, including two global flagships in Houston and Tokyo, and strong direct to consumer comparable sales growth of 22 percent, excluding the impact of the extra week. Our small leather goods and handbag categories led this robust growth. Moreover, we are reaffirming our 2014 Adjusted EBITDA guidance of 115-125 million dollars.”

Gross profit as a percentage of net sales decreased to 55.3 percent in the first quarter of 2014, compared to 57.4 percent in the comparable 2013 period. Net income in the first quarter of 2014 was 46 million dollars, inclusive of income related to discontinued operations of 101 million dollars, compared to net loss of 52 million dollars, inclusive of a loss related to discontinued operations of 13 million dollars in the first quarter of 2013. Net income per share was 0.37 dollars in the first quarter of 2014, compared to a loss per share of 0.44 dollars in the first quarter of 2013.

Net sales for Kate Spade were 217 million dollars, a 54 percent increase compared to 2013, reflecting increases across all operations in the segment. New York-based company ended the quarter with 127 specialty retail stores, 52 outlet stores and 46 concessions, reflecting the opening (net of closures) of 35 specialty retail stores, 10 outlet stores and 9 concessions and the acquisition of 6 specialty retail stores, 1 outlet store and 2 concessions over the last 12 months. Kate Spade Segment Adjusted EBITDA in the first quarter of 2014 was 32 million dollars (14.9 percent of net sales), compared to Segment Adjusted EBITDA of 19 million dollars (13.4 percent of net sales) in 2013.

Net sales for Juicy Couture in the first quarter of 2014 were 104 million dollars, a 17.1 percent increase compared to 2013, which primarily reflected increases in e-commerce, wholesale non-apparel, wholesale apparel and specialty retail operations, partially offset by a decrease in licensing operations, as company winds down the Juicy Couture operations. Juicy Couture Segment Adjusted EBITDA was flat in the first quarter of 2014, compared to Segment Adjusted EBITDA of 9 million dollars (9.6 percent) of net sales) in the first quarter of 2013.

Net sales for the Adelington Design Group segment decreased 9 million dollars, or 58.1 percent, in the first quarter of 2014 to 6 million dollars, reflecting a net 5 million dollars decrease related to the Lizwear, Liz Claiborne New York and private label jewelry businesses; a 3 million dollars decrease related to the Liz Claiborne and Monet brands; and a 1 million dollars decrease primarily related to former Dana Buchman brand supplier agreement. Adelington Design Group Segment Adjusted EBITDA in the first quarter was 0.4 million dollars (6.6 percent of net sales), compared to Segment Adjusted EBITDA of 4 million dollars (25 percent of net sales) in 2013.