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Kate Spade Shares Jump After Handbag Maker Increases Forecast

Kate Spade summer 2014 campaign | Source: Kate Spade
By
  • Bloomberg

NEW YORK, United States — Kate Spade & Co., the handbag maker with aspirations to be a global lifestyle brand, jumped as much as 12 percent in early trading after beating quarterly earnings estimates and raising its annual forecast.

Second-quarter earnings amounted to 5 cents a share, excluding some items, the New York-based company said today in a statement. Analysts had predicted break-even results, according to data compiled by Bloomberg. Kate Spade posted $266 million in revenue, topping the $237 million estimate.

The company’s North American and international divisions both saw sales increases of more than 50 percent last quarter, even as retailers had to rely more heavily on promotions to entice customers. Kate Spade also boosted its annual earnings forecast to as much as $130 million, up from a high end of $125 million.

"Our differentiated product resonates with consumers around the world," Chief Executive Officer Craig Leavitt said in the statement. "We have a clear vision of our customer and continue to design strong collections as we shape our fast- growing, global lifestyle brand."

The shares climbed as high as $43.50 in early trading after the report was released. Before the jump, the stock had risen 21 percent this year.

By Nick Turner; Editor: John Lear

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