A look from Kate Spade's Fall 2014 presentation. Photo: Imaxtree
Following the hire of Roy Chan as Kate Spade's first senior vice president of international, the company has now started breaking down its quarterly earnings along the lines of its North American and international businesses. And as it turns out, those numbers were pretty great for the second quarter of 2014, which encompassed the three months ending July 5.
According to the numbers Kate Spade released on Tuesday morning, international and North American sales grew at roughly the same clip in the second quarter of 2014 — a solid 54 and 55 percent, respectively, bringing in $49 and $208 million in net sales each. Factoring in its Adelington Design Group business, which had a sub-par quarter, Kate Spade & Co grew 49 percent for the quarter to $266 million.
The company's margins, on the other hand, shrunk over the course of the quarter to 58.6 percent from 61.8 in 2013. In fact, Kate Spade expects its gross margins to fall for the duration of the year, an unfortunate bit of news that sent share prices tumbling roughly 23 percent on Tuesday. The leading cause of the narrowed margins is weak sales and promotional activity from Kate Spade Saturday, the brand's younger line.
In the world of e-commerce, Kate Spade is planning to roll out its UK site in the fourth quarter of 2015, with further launches slated for the first part of 2015. Japan's newly relaunched website saw its sales double in the second quarter; clearly online is a good place for the company to be investing.
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