Robust Online Sales Boost Kate Spade’s 4Q16 Top Line



Kate Spade records an 11% jump in its 2016 sales

Kate Spade New York (KATE) reported a 10% rise in its 4Q16 sales to $471 million. Its 4Q16 comps stood at 9.3%, compared to 3Q16’s 7% and 2Q16’s 4% comps growth.

Most of the improvement in KATE’s comps during 4Q16 was driven by the company’s robust e-commerce business. Excluding e-commerce, KATE’s sales comps rose ~1.5%. For 2016, KATE’s total sales rose 11% to $139 million.

Craig A. Leavitt, Kate Spade’s CEO, said, “Our solid fourth quarter and fiscal year performance demonstrate the strength of our differentiated business model, as we continued to gain market share and deliver strong growth despite a challenging retail environment.”

Leavitt continued, “In 2016, we further strengthened our handbag portfolio, introduced new categories to our casual ready-to-wear classifications, and thoughtfully expanded our global store base, opening 52 net new owned and partner-operated stores.”

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What drove 4Q16 sales?

KATE’s 4Q16 sales were driven by strength in the company’s domestic and international operations. The company’s North American business, which accounted for 86% of its top line, rose 9.5% during the quarter. Its international sales rose 12.4% YoY (year-over-year).

ETF investors seeking to add exposure to Kate can consider the First Trust Consumer Discretionary AlphaDEX ETF (FXD), which invests 0.31% of its portfolio in the company.

How did competitors fare?

Kate Spade’s close competitors and leading handbag manufacturers Coach (COH) and Michael Kors (KORS) recently reported their quarterly results. While Michael Kors reported a 3.6% fall in its sales and missed consensus estimates, Coach reported a 3.9% rise in its top line, in line with analysts’ forecasts.

Read the next article to learn about Kate’s margins and profitability in 4Q16.


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