Fifth & Pacific Companies, Inc.
) rose 4.2% to $28.89 on Oct 7, 2013 from the previous day's
closing price after the company posted strong financial results
for the third quarter of fiscal 2013. The company's adjusted loss
of 3 cents per share from continuing operations was narrower than
the year-ago comparable quarter loss of 5 cents.
The year-over-year improvement in results was primarily driven
by top-line growth. However, quarterly loss was higher than the
Zacks Consensus Estimate of a loss of a penny. On a reported
basis, the company's quarterly loss came in at 12 cents per share
compared with a loss of 17 cents in the year-ago comparable
Net sales rose 18.1% year over year to $430.6 million in the
quarter, primarily driven by strong performances at the company's
Kate Spade and Lucky Brand segments, partially offset by weak
sales at Juicy Couture and Adelington Design Group segments.
Adjusted gross profit margin expanded 75 basis points (bps) to
56.5% in the quarter owing to increased penetration of the higher
margin Kate Spade business as well as improved gross profit rates
at the Juicy Couture and Adelington businesses.
Adjusted selling, general & administrative (SG&A)
expenses of this Zacks Rank #2 (Buy) increased 20% year over
year, which was higher than the top-line growth. As a percentage
of sales, SG&A expenses were 55%, up 80 bps from 54.2% in the
comparable period last year. All this resulted in a
year-over-year improvement of $4.0 million in the adjusted
earnings before interest, taxes, depreciation and amortization
(EBITDA) to $25.0 million.
Fifth & Pacific ended the quarter with cash and cash
equivalents of $6.8 million. Total debt at the quarter-end was
$522.0 million compared with $386.0 million at the end of the
year-ago period. The increase in total debt was primarily due to
the company's investment towards acquiring Kate Spade Japan and
the increasing inventory of Kate Spade business.
Fifth & Pacific expects its fiscal 2013 adjusted EBITDA to
come in the range of $120-$140 million. Depreciation and
amortization for the fiscal is anticipated to be $70-$75 million.
During fiscal 2013, the company intends to make a capital
expenditure of $115.0 million. Debt balance at the year-end is
projected to be $280 million and interest expenses in the range
of $46-$48 million.
Other Stocks to Consider
Apart from Fifth & Pacific, other better-performing stocks
in the apparel-retail industry include
Finish Line Inc.
Fossil Group, Inc.
). All of these carry Zacks Rank #2 (Buy).
DSW INC CL-A (DSW): Free Stock Analysis
FINISH LINE-CLA (FINL): Free Stock Analysis
FIFTH PACIFIC (FNP): Free Stock Analysis
FOSSIL GRP INC (FOSL): Free Stock Analysis
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