Kate Spade Shares Plunged 16.1% In The Second Quarter

U.S.A

The second quarter results were announced, and turnover growth was lower than Wall Street forecast. By the end of the release, Kate Spade shares fell 16.1% to $16.89 per share.

The company's CEO Craig A. Leavitt said the decline in retail environment and tourism consumption led to second quarter earnings lower than expected.

The company's president and chief operating officer, George Carrara, said the company is adopting a cautious approach to set targets for performance in the second half of this year.

In the first three months of July 2nd, net profit rose more than 3 times, to 26 million 800 thousand US dollars, and diluted earnings per share of 21 cents; compared to a year ago, the company's net profit was 8 million 500 thousand US dollars and diluted 7 cents per share.

On the basis of adjustment, the diluted earnings per share obtained from continuous operation are 11 cents.

Net turnover increased by 12.7%, from $281 million 100 thousand last year to $319 million 700 thousand.

Wall Street analysts generally forecast a turnover of $318 million 600 thousand and a profit of 14 cents per share.

In the first six months, the company's net income was $38 million 400 thousand, diluted earnings per share were 30 cents, compared with a year ago, a net loss of 46 million 700 thousand dollars, a diluted loss of 37 cents per share.

Net turnover increased by 10.8%, from $5.364 last year to $594 million 100 thousand.

By market segmentation, the net turnover of Kate Spade in North America increased by 15.1%, to US $271 million, and the turnover gained from the streamlined operation structure increased by 17.1% on the basis of market adjustment.

Kate Spade's net overseas turnover increased by 6.6% to $43 million, while Adelington Design Group's net turnover increased by 4.8%, recording 5 million dollars.

George Carrara expresses its confidence in the company's long-term growth capability. Based on the company's expansion strength, strong business foundation and revenue and expenditure capabilities, it can enhance the company's licensed business and supply chain services, and promote strong profit growth in 2016.

The company expects net sales of $1 billion 370 million to $1 billion 400 million in 2016.

The performance of American light luxury brands is now mixed. Another light luxury brand Coach has started to go out of its trough from the 2016 second quarter. After 10 consecutive quarters of declining revenue, it began to record 4.5% growth, exceeding Wall Street's expectations, and resumed growth in the third quarter, with a net sales of 1 billion 30 million US dollars, representing a 11% increase over the same period last year.

Earlier, according to an analysis report by Corinna Freedman, an analyst of BB&T company, the negative trend of Coach company is no longer deteriorating, and its business condition is improving.

Some industry analysts say that the luxury giants, including Michael Kors and Coach, are correcting the wrong business models. They have made a classic mistake, that is, using brand reputation to fall into many common traps of fast developing retail brands, including rapid business expansion, large number of shops, and the use of discounts to retain customers.

The ultimate negative effect is that consumers will never pay for the standard handbags.

Now, Coach is aware of the problem. The strategic plan for Brand Revitalization and its good performance are all in line with the industry's expectations and enhanced.

Confidence in retail goals.

Reducing the number of blind, endless promotions is the first step in its recovery.