Fifth & Pacific Companies Inc
) has recently lowered its adjusted EBITDA outlook for fiscal 2012
since it has witnessed lower-than-expected performance at one of
its strongest brands -
. The company now expects adjusted EBITDA to come in the range of
$100-$115 million from the earlier projection of $125-$140
Since the beginning of fiscal 2012, the company has been
encountering certain issues related to merchandising and pricing in
brand, which resulted in a massive fall in the company's full-price
realizations. Further, the trend is expected to continue through
the rest of the current fiscal year. During the first six months of
fiscal 2012, the brand has generated total sales of $215.1 million,
which was far below the prior-year level of $232.5 million.
Further, the company's shipments were delayed during the third
quarter due to some problems pertaining to the closure of its Ohio
distribution facility. Earlier, the company had planned to
outsource its distribution function from third parties and close
down this facility. To counter the situation, Fifth & Pacific
planned to continue shipping goods from the facility for the near
However, Fifth & Pacific strongly believes that by improving
inventory management and the allocation process, it can overcome
these challenges. Moreover, the company is planning new
merchandising and pricing strategies for the Juicy Couture brand at
the store level. These initiatives are anticipated to reduce costs
while boosting the company's top line.
Apart from this, Fifth & Pacific has also announced its
preliminary results for the third quarter of fiscal 2012. Per the
company, adjusted EBITDA is expected to come in the band of $17-$20
million. Moreover, it's
brands will continue to report better-than-expected results.
The company's Kate Spade and Lucky brands' direct-to-consumer
(including e-commerce net sales) comparable sales are anticipated
to increase by 21% and 4%, respectively. However, Juicy Couture's
direct-to-consumer comparable sales are likely to inch down by
Fifth & Pacific designs and markets a portfolio of
retail-based, premium, global lifestyle brands including Juicy
Couture, Kate Spade and Lucky Brand. The Company's Juicy Couture
brand offers luxurious, casual and fun women's and girl's apparel,
accessories and jewelry. The Kate Spade brand offers fashion
products like accessories, apparel and jewelry for women and men.
Its Lucky brand offers an expanded assortment of men's and women's
denim, woven and knit tops, dresses and sweaters, graphic tees,
accessories and jewelry.
Fifth & Pacific, which competes with
), currently has a Zacks #3 Rank, implying a short-term Hold
rating. Moreover, the company retains a long-term 'Neutral'
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