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4-Traders Homepage  >  Shares  >  Nyse  >  Kate Spade & Co    KATE

Delayed Quote. Delayed  - 08/28 04:01:23 pm
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Kate Spade & C : mpany : Reports Second Quarter 2015 And First Half 2015 Results

08/12/2015 | 12:27pm US/Eastern

By a News Reporter-Staff News Editor at Investment Weekly News -- Kate Spade & Company (NYSE:KATE) announced results for the second quarter ended July 4, 2015.

Net sales for the second quarter of 2015, excluding sales for wind-down operations, were $273 million, an increase of $46 million, or 20.1% compared to the second quarter of 2014, adjusting 2014 net sales for wind-down operations and excluding changes in foreign currency exchange rates and 2015 strategic initiatives. Refer to the table entitled "Reconciliation of Non-GAAP Net Sales Information" for a reconciliation from GAAP results.

Reported net sales for the second quarter of 2015 were $281 million, an increase of $15 million, or 5.7%, from the comparable 2014 period.

Craig A. Leavitt, Chief Executive Officer of Kate Spade & Company, said: "Our second quarter results demonstrate our focus on building a diverse business model that will drive sustainable, long-term growth. Our strategy is centered on key factors that differentiate Kate Spade & Company - including our lifestyle brand vision, partnered approach to expansion and efforts to build quality of sale. Our success with new product introductions shows that we are resonating with our existing customers, as well as attracting new customers to our brand across our four category pillars. We are driving clear results, including direct-to-consumer comparable sales growth of 10% versus last year."

Mr. Leavitt concluded: "As we become an enduring lifestyle brand, we continue to concentrate on building brand equity, generating awareness and managing our points of distribution to drive sales and profitability."

George Carrara, President and Chief Operating Officer of Kate Spade & Company, added: "In the second quarter of 2015, we successfully realized approximately 300 basis points of Adjusted EBITDA margin expansion and are increasing the low end of our full year Adjusted EBITDA guidance. We are well positioned to achieve our 2015 updated guidance and continue to build on this momentum going forward."

For the second quarter of 2015 on a GAAP basis, income from continuing operations was $9 million, or $0.07 per share, compared to a loss from continuing operations of ($14) million, or ($0.11) per share, for the second quarter of 2014. Adjusted diluted earnings per share from continuing operations in the second quarter of 2015 were $0.08, compared to $0.05 per share in the second quarter of 2014.

For the first half of 2015, the Company recorded a loss from continuing operations of ($44) million, or ($0.35) per share, compared to a loss from continuing operations for the first half of 2014 of ($52) million, or ($0.42) per share. Reported net sales for the first half of 2015 were $536 million, an increase of $47 million, or 9.6%, from the comparable 2014 period. Adjusted diluted earnings per share from continuing operations in the first half of 2015 were $0.10 compared to $0.01 in the first half of 2014. Net sales for the first half of 2015, excluding sales for wind-down operations, were $512 million, an increase of $99 million, or 23.8% compared to the first half of 2014, adjusting 2014 net sales for wind-down operations and excluding the impacts of the 53rd week, changes in foreign currency exchange rates and 2015 strategic initiatives. Adjusted EBITDA, excluding the previously announced wind-down operations in 2015 was $69 million for the first half of 2015.

The Company will host a conference call at 8:30 am Eastern time today to discuss its results for the second quarter 2015. The dial-in number is 1-888-694-4676 with pass code 80793070. The webcast and slides accompanying the prepared remarks can be accessed via the Investor Relations section of the Kate Spade & Company website at www.katespadeandcompany.com. An archive of the webcast will be available on the website. Additional information on the results of the Company's operations is available in the Company's Form 10-Q for the second quarter 2015, to be filed with the Securities and Exchange Commission.

The Company determined each of the Kate Spade Saturday, Jack Spade, Kate Spade Brazil and Adelington Design Group initiatives do not represent a strategic shift in the Company's operations and therefore will not present their activities as discontinued operations.

Adjustments to net sales for wind-down operations include net sales for Kate Spade Saturday, Jack Spade brick and mortar locations, Kate Spade Brazil and brand exits in the Adelington Design Group segment in both periods. In addition to those items, the impacts of the 53(rd) week, changes in foreign currency exchange rates and strategic initiatives, including quality of sale and the conversion of the Hong Kong, Macau and Taiwan territories to a joint venture are adjusted in 2014. Refer to the table entitled "Reconciliation of Non-GAAP Net Sales Information" for a reconciliation from GAAP results.

The adjusted results for the second quarter 2015 and 2014, as well as 2015 guidance, exclude the impact of expenses incurred in connection with the Company's streamlining initiatives (such as severance costs, contract termination costs, asset write-downs and other costs) and brand-exiting activities, acquisition related costs, loss on settlement of note receivable and loss on extinguishment of debt. The adjusted results for the first half of 2015 also exclude a $26 million charge related to the termination of certain contracts with the Company's former joint venture partner in Kate Spade China Co., Ltd. The Company believes that the adjusted results for such periods represent a more meaningful presentation of its historical operations and financial performance since these results provide period to period comparisons that are consistent and more easily understood. In addition to those items, the Company presents its 2015 adjusted results further adjusted to exclude the adjusted results of wind-down operations (Kate Spade Saturday, Jack Spade brick and mortar, Kate Spade Brazil and brand exits in the Adelington Design Group segment). The Company believes that the adjusted results excluding wind-down operations provide a meaningful presentation of its 2015 results on a go-forward basis and on a consistent basis with the Company's 2015 guidance. The attached tables, captioned "Reconciliation of Non-GAAP Financial Information," provide a full reconciliation of actual results to the adjusted results. The Company presents Adjusted EBITDA, which it defines as income (loss) from continuing operations, adjusted to exclude income tax provision (benefit), interest expense, net, depreciation and amortization, net, expenses incurred in connection with the Company's streamlining initiatives, brand-exiting activities, acquisition related costs, non-cash impairment charges, losses on asset disposals, loss on settlement of note receivable, loss on extinguishment of debt, non-cash share-based compensation expense and unrealized and certain realized foreign currency transaction adjustments, net. The Company presents the above-described Adjusted EBITDA measures because it considers them important supplemental measures of its performance and believes they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. The Company also presents Adjusted EBITDA Excluding Wind-Down Operations, which the Company defines as Adjusted EBITDA further adjusted to remove the Adjusted EBITDA of Kate Spade Saturday, Jack Spade brick and mortar, Kate Spade Brazil and the brand exits in the Adelington Design Group segment. The Company believes this Adjusted EBITDA measure provides a meaningful presentation of its 2015 results on a go-forward basis that is consistent with its 2015 guidance.

Keywords for this news article include: Kate Spade & Company, Finance and Investment, Investment and Finance.

Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2015, NewsRx LLC

(c) 2015 NewsRx LLC, source Business Newsletters

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