Kate Spade Quarterly Sales Jump 30%
Kate Spade & Co (NYSE:KATE) reported a 30 percent rise in quarterly sales as demand for its handbags and fashion accessories rose in North America, its biggest market.
Shares of Kate Spade, which gets more than three-quarters of its total revenue from North America, rose 12.3 percent in premarket trading.
Sales in North America jumped 36.4 percent in the third quarter, driven mainly by increased demand for its higher-margin kate spade new york-branded handbags and accessories.
The company's other brands include Kate Spade Saturday and Jack Spade.
Kate Spade has been eating into larger rival Coach Inc's share in the U.S. handbag market, as young women prefer the company's trendy handbags over its larger rivals' products, which have become ubiquitous and fallen out of favor.
The brand's popularity has also grown after U.S. President Barack Obama's daughters Sasha and Malia Obama wore Kate Spade at his presidential inauguration for the second term.
Kate Spade raised its full-year global same-store sales growth forecast to 19-21 percent from 15-17 percent. The company's global same-store sales include its online business.
Global same-store sales rose 15.2 percent in the third quarter ended Oct. 4. Analysts on average had expected a rise of 10.9 percent, according to research firm Consensus Metrix.
Coach reported its sixth straight quarter of decline in North America same-store sales last week, but the 24 percent fall was slightly smaller than what analysts had expected.
Kate Spade's net loss narrowed to $9.1 million, or 7 cents per share, in the third quarter from $16.9 million, or 14 cents per share, a year earlier.
Excluding items, the company reported a slight loss from continuing operations.
Sales rose to $250.4 million from $192.7 million.
Analysts on average had expected a profit of 2 cents per share and revenue of $253.9 million, according to Thomson Reuters I/B/E/S.
Kate Spade's shares closed at $26.26 on the New York Stock Exchange on Wednesday. Up to Wednesday's close, the stock had fallen about 18 percent this year.
(Reporting by Devika Krishna Kumar and Yashaswini Swamynathan in Bangalore; Editing by Ted Kerr and Kirti Pandey)