Kate Spade Hits All-time High - Analyst Blog


Shares of Fifth & Pacific Companies Inc., now known as Kate Spade & Company ( KATE ) reached a new 52-week high of $36.44 on Mar 4, 2014, closing trade slightly below at $35.50. This apparel store retailer has been on the rise, since it completely sold off its Lucky Brand Jeans segment on Feb 3, 2014. This momentum was further amplified by solid fourth-quarter fiscal 2013 earnings reported on Feb 26. The stock has gained nearly 28.8% since Feb 3 and generated a full-year return of roughly 89.8%.

The average volume of shares traded over the last 3 months was approximately 1,674.8K. Moreover, the projected long-term earnings per share (EPS) growth rate stands at 10.0%.

As part of its previously announced plan, Kate Spade & Co. completely sold its Lucky Brand Jeans segment on Feb 3, 2014, to a partner of Leonard Green & Partners L.P for $225 million, following which it will be accounted under the company's discontinued operations. Also, the company is on track to dispose its Juicy Couture brand. These divestitures will make Kate Spade & Co. a single-brand company focused on extracting the best from its core Kate Spade brand.

Apart from the aforementioned sale, the company's robust fourth-quarter earnings induced a positive movement in the stock. In fourth-quarter fiscal 2013, the company posted strong financial results with adjusted earnings of 15 cents per share, up a whopping 275% year over year.

Net sales for the quarter, excluding Lucky Brand and including Juicy Couture rose 22.3% year over year to $427.0 million. Sales were augmented by a strong performance at Kate Spade, partly offset by a weak performance at Juicy Couture and Adelington Design Group segments.

By segment, sales at the company's Kate Spade segment surged 48%, while the Juicy Couture segment and Adelington Design Group delivered a 1.4% and 13% decline, respectively.

The encouraging results along with the company's shift to a single brand company facilitated a slight improvement in the Zacks Consensus Estimate. For fiscal 2014, the Zacks Consensus Estimate escalated 4.3% to 24 cents a share, while the estimate for fiscal 2015 surged 3.1% to 67 cents per share.

Apart from Kate Spade, companies such as Church & Dwight Co. Inc. ( CHD ), The Walt Disney Company ( DIS ) and Foot Locker Inc. ( FL ) achieved new 52-week highs of $69.41, $82.17 and $42.98, respectively, on Mar 4, 2014.

CHURCH & DWIGHT (CHD): Free Stock Analysis Report

DISNEY WALT (DIS): Free Stock Analysis Report

FOOT LOCKER INC (FL): Free Stock Analysis Report

KATE SPADE&CO (KATE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: EPS , CHD , DIS , FL , KATE



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