Why Kate Spade & Co Stock Fell 15% in May

Image source: Kate Spade & Co.

What: Shares of Kate Spade & Co fell 15% in May, according to data provided by S&P Global Market Intelligence

So what: Sales rose 14.5% in the quarter to $274 million after excluding wind-down operations. Maybe most impressive, direct-to-consumer comparable sales were up 19%, showing the company adapting to the e-commerce movement.

What investors really had their eyes on, however, was full-year revenue guidance of $1.385 billion to $1.410 billion and earnings of $0.70 to $0.80 per share. Both figures were on the low end of what analysts expected.

Now what: Luxury brands have had a rough year with global economic growth slowing, so Kate Spade's growth is impressive given the macro backdrop. While shares were down, I think the company is performing well and analysts had just set expectations too high before the quarter.

A lot of companies are having a hard time adapting to the e-commerce business, and with Kate Spade adapting well, this is a retail brand that should continue to take market share going forward.

The article Why Kate Spade & Co Stock Fell 15% in May

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