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Kate Spade posts 13.7 percent increase in FY16 net sales

By Prachi Singh

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Management

Kate Spade & Company’s net sales for the full year were 1.381 billion dollars, an increase of 139 million dollars or 11.2 percent, compared to the full year 2015. Net sales increased 166 million dollars or 13.7 percent, excluding sales for wind-down operations for the full year 2015. Adjusted EBITDA was 261 million dollars compared to adjusted EBITDA, excluding wind-down operations of 203 million dollars for the full year 2015. The company also said that it is in the process of reviewing strategic alternatives to enhance shareholder value.

"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. In 2016, we thoughtfully expanded our global store base, opening 52 net new owned and partner-operated stores," said Craig A. Leavitt, Chief Executive Officer of Kate Spade & Company in a press release.

Full year earnings rise to 1.17 dollars

For the full year 2016 on a GAAP basis, the company recorded income from continuing operations of 152 million dollars or 1.17 dollars per diluted share, compared to income from continuing operations for 2015 of 22 million dollars or 0.17 dollar per diluted share. Diluted earnings per share were 0.70 dollar compared to adjusted diluted earnings of 0.48 dollar for the full year 2015.

"We are pleased to report top-line growth of 14 percent for the full-year. In 2016, we delivered Adjusted EBITDA margin expansion of 220 basis points compared to the prior year, reflecting our ongoing focus on expense management, as well as the benefit of lower annual incentive compensation year-over-year,” added George Carrara, President and Chief Operating Officer of Kate Spade & Company.

Fourth quarter net sale up 9.8 percent

Net sales for the fourth quarter of 2016 were 471 million dollars an increase of 42 million dollars or 9.8 percent compared to the fourth quarter of 2015. Net sales for the quarter increased 43 million dollars or 10.1 percent, excluding sales for wind-down operations for the fourth quarter of 2015.

Direct-to-consumer comparable sales growth was 9.3 percent or down 1.5 percent excluding ecommerce. Comparable sales per square foot for kate spade new york stores were 1,557 dollars for the latest twelve months, compared to 1,615 dollars for the twelve month period ended October 1, 2016, partially impacted by foreign exchange rates.

Income from continuing operations was 87 million dollars or 0.67 dollar per diluted share compared to 62 million dollars or 0.48 dollar per diluted share, in the fourth quarter of 2015. Diluted earnings per share from continuing operations using a normalized tax rate were 0.41 dollar, compared to adjusted diluted earnings per share of 0.32 dollar in the fourth quarter of 2015.

North America segment net sales rise 9.5 percent

Kate Spade North America net sales for the fourth quarter were 407 million dollars, an increase of 35 million dollars or 9.5 percent compared to the fourth quarter of 2015. Kate Spade North America segment adjusted EBITDA was 107 million dollars (26.4 percent of net sales) for the quarter compared to 91 million dollars (24.5 percent of net sales) for the fourth quarter of 2015.

Kate Spade International net sales were 59 million dollars, an increase of 6 million dollars or 12.4 percent compared to the fourth quarter of 2015. Net sales increased 8 million dollars or 15.2 percent, excluding sales for wind-down operations for the fourth quarter of 2015. Kate Spade International Segment adjusted EBITDA was 10 million dollars (17.1 percent of net sales) and 4 million dollars (8.6 percent of net sales) in 2015. Segment adjusted EBITDA excluding wind-down operations was 5 million dollars (9.1 percent of adjusted net sales) for the fourth quarter of 2015.

Adelington Design Group net sales were 6 million dollars, an increase of 2.3 percent compared to the fourth quarter of 2015. Segment’s adjusted EBITDA was 1 million dollars (14.4 percent of net sales) compared to 2 million dollars (32.3 percent of net sales) for the fourth quarter of 2015. Segment adjusted EBITDA excluding wind-down operations was 1 million dollars (26.6 percent of net sales) for the fourth quarter of 2015.

Picture:Facebook/Kate Spade

Kate Spade & Company