Kate Spade Sales Climb Amid Retail Weakness

Kate Spade & Co. on Wednesday said results in its latest quarter topped estimates despite a weak retail landscape.

Shares, down 8.1% this year, added back 2.4% to $16.72 in premarket trading.

Kate Spade, the former Fifth & Pacific Cos. and Liz Claiborne Inc., has shifted its focus toward its flagship Kate Spade New York brand amid weakness in a saturated handbag market as shoppers spend less on purses and increasingly opt for smaller, less-expensive options.

On Wednesday, Chief Executive Craig Leavitt said several macroeconomic factors, including a challenging retail environment and continuing tourist headwinds, affected results. Still, he pointed to consumers' "strong response to our collections at full-price."

During the September quarter, comparable sales—which includes e-commerce—increased 6.7%. Excluding online sales, comparable sales were flat.

In all, the company reported a profit of $29.6 million, or 23 cents a share, up from $2.3 million, or 2 cents a share, a year prior.

Adjusted earnings rose to 13 cents a share. Revenue climbed 14% to $316.5 million. Analysts polled by Thomson Reuters had projected 8 cents in adjusted earnings per share on $310.7 million in revenue.

The company backed its guidance for sales between $1.37 billion and $1.4 billion and adjusted per-share earnings between 63 cents and 70 cents.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

November 02, 2016 08:55 ET (12:55 GMT)

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