Source: Company reports

4Q15 RESULTS

Kate Spade reported 4Q15 revenues of $428 million, up 13.9% from $376 million in the year-ago period and 2.7% below the consensus estimate. The company reported quarterly comps growth of 7.6%, which was driven by “two axes of growth”, namely product categories and geographic expansion. In 2015, Kate Spade introduced 14 new product categories and established business in eight new countries. Along with the earnings results on March 1, Kate Spade announced partnership with the Reliance Brands Limited to enter the Indian market. Finally, the brand’s channel agnostic approach was also a key factor its satisfying performance.

2015 RESULTS

Net sales excluding discontinued operations were $1.24 billion for 2015, up 20.6% from 2014 and slightly above consensus of 1.23 billion. Comp sales increased by 13% for the year. The management was pleased with the: leading comp sales growth and expressed confidence that the company should generate strong double-digit growth on both top and bottom line in 2016. The company hopes to continue the momentum from 2015 and generate growth across its four category pillars: women’s, men’s, children and home.

GUIDANCE

Kate Spade provided guidance for diluted EPS of $0.7–$0.8 for 2016, assuming low to mid-teens comps and total sales of $1.39 billion to $1.41 billion. As for store expansion, the company plans to open 40-45 new stores in 2016. The sales guidance came slightly below consensus of 1.44 billion for the year.