On Aug 14, 2014, Zacks Investment Research upgraded
Kate Spade & Co.
) to a Zacks Rank #1 (Strong Buy) following its splendid
second-quarter 2014 performance as well as raised guidance for the
Why the Upgrade?
On Aug 12, Kate Spade & Co. reported yet another quarter of
better-than-expected financial results wherein it's adjusted
earnings of 5 cents per share from continuing operations fared
better than the Zacks consensus Estimate of a loss of a penny as
well as the year-ago quarter's adjusted loss of 8 cents from
Net sales for the quarter, excluding Lucky and Juicy Couture
brands rose 48.7% year over year to $266 million, beating the Zacks
Consensus Estimate of $229 million. Sales improved due to strong
performance at Kate Spade's domestic and international
Bolstered by tremendous financial performance in two
back-to-back quarters, the company has raised its full-year 2014
earnings before interest, taxes, depreciation and amortization
(EBITDA) and direct-to-consumer comparable sales (DTC comps) growth
Kate Spade & Co. now anticipates adjusted EBITDA to come
between $120 million and $130 million, up from earlier guidance
range of $115-$125 million. Similarly, DTC comps are now projected
to grow in the band of 15%-17% compared with the previously
projected range of 12%-15%.
Furthermore, the company expressed its intent of splitting the
core brand's reportable segments into two: Kate Spade North America
and Kate Spade International. This split will allow investors
to have a clear understanding of the financial position of the two
Other Stocks to Consider
Besides Kate Spade & Co., other stocks in the apparel retail
sector that are currently performing well include Citi Trends, Inc.
), The Men's Wearhouse, Inc. (
) and The Buckle Inc. (
). Citi Trends and Men's Wearhouse sport a Zacks Rank #1 (Strong
Buy), while Buckle holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
BUCKLE INC (BKE): Free Stock Analysis Report
CITI TRENDS INC (CTRN): Free Stock Analysis
MENS WEARHOUSE (MW): Free Stock Analysis Report
KATE SPADE&CO (KATE): Free Stock Analysis
To read this article on Zacks.com click here.