Kate Spade Q1 net sales drop 1.2 percent

Kate Spade & Company net sales for the first quarter of 2017 were 271 million dollars, a decrease of 3 million dollars or 1.2 percent, compared to the first quarter of 2016. Adjusted EBITDA was 30 million dollars compared to 35 million dollars for the first quarter of 2016.

Commenting on the first quarter performance, Craig A. Leavitt, Chief Executive Officer of Kate Spade & Company, said, "Despite a challenging retail environment and the later Easter holiday, we achieved yet another quarter of double-digit ecommerce comparable sales growth, which helped offset softness in bricks and mortar stores. Against this backdrop, we delivered strong gross margin expansion while working to drive profitable growth across our categories and channels."

Financial update of the first quarter

First quarter 2017 direct-to-consumer comparable sales declined 2.4 percent or 8.1 percent excluding ecommerce. Comparable sales per square foot for kate spade new york stores were 1,516 dollars for the latest twelve months, compared to 1,557 dollars for the same period ended December 31, 2016.

Gross profit as a percentage of net sales was 63.2 percent for quarter compared to 61.8 percent for the first quarter of 2016. Income from continuing operations was 1 million dollars or 0.01 dollar per diluted share, compared to 11 million dollars or 0.08 dollar per diluted share, in the first quarter of 2016. Diluted earnings per share from continuing operations using a normalized tax rate were 0.01 dollar, compared to 0.05 dollar in the first quarter of 2016.

Kate Spade North America segment sales drop

Kate Spade North America net sales were 217 million dollars, a decrease of 1 million dollars or 0.6 percent, while adjusted EBITDA was 23 million dollars (10.5 percent of net sales) compared to 25 million dollars (11.2 percent of net sales) for the first quarter of 2016.

Kate Spade International net sales were 49 million dollars, flat compared to the first quarter of 2016 and adjusted EBITDA was 8 million dollars (15.9 percent of net sales) for the first quarter of 2017, compared to 9 million dollars (17.5 percent of net sales) for the first quarter of 2016.

Adelington Design Group net sales were 5 million dollars, a decrease of 2 million dollars or 29.3 percent, while adjusted EBITDA was 1 million dollars (10.5 percent of net sales) for the first quarter of 2017, compared to 2 million dollars (31.8 percent of net sales) for the first quarter of 2016.