KATE
Kate Spade & Co
Consumer
04/17/2015
Presented
| Date | 04/14/2015 |
| Price | $33.71 |
| Market Cap | $4.30B |
| Ent Value | $4.53B |
| P/E Ratio | 56.2x |
| Book Value | $1.57 |
| Div Yield | N/A |
| Shares O/S | 127.64M |
| Ave Daily Vol | 1,930,000 |
| Short Int | 7.41% |
Current
| Price | $18.49 |
| Market Cap | $2.38B |
| Kate Spade & Company, together with its subsidiaries, designs and markets apparel and accessories. The company operates in three segments: KATE SPADE North America, KATE SPADE International, and Adelington Design Group. It offers handbags, briefcases, small leather goods, fashion accessories, jewelry, fragrances, and apparel for men, women, and children; and holds licensing agreements for footwear, swimwear, watches, optics, tabletop products, legwear, electronics cases, bedding, and stationery. The company markets and sells its products under the kate spade new york, KATE SPADE SATURDAY, JACK SPADE, AXCESS, MARVELLA, and TRIFARI brand names. It also designs, develops, and supplies jewelry for the LIZ CLAIBORNE and MONET brands; licenses LIZ CLAIBORNE NEW YORK brand; and engages in the apparel and non-apparel wholesale operations of the licensed LIZWEAR brand and other brands. The company sells its products through wholly-owned specialty retail and outlet stores, and upscale department stores, as well as e-commerce Websites. As of December 31, 2014, it had 108 specialty retail stores and 58 outlet stores with a retail square footage of approximately 315,000 square feet in North America; and 42 specialty retail stores, 15 outlet stores, and 54 concessions with a retail square footage of approximately 94,000 square feet internationally. The company was formerly known as Fifth & Pacific Companies, Inc. and changed its name to Kate Spade & Company in February 2014. Kate Spade & Company was founded in 1976 and is based in New York, New York. |
Publicly traded companies mentioned herein: Kate Spade (KATE), Michael Kors (KORS) and Coach (COH)
Highlights
The presenter believes the Kate Spade brand continues to resonate with consumers. A hiccup last year relating to guidance on decelerating comps and longer term margins took away from the company’s momentum, but KATE has since printed two very good quarters, with comps of 15% in Q3 and 28% in Q4. The company did away with its two biggest drags on margins - Kate Spade Saturday and Jack Spade - and management additionally re-set longer term margin guidance to the more reasonable 18-20% range. The stock has done just okay since, but the presenter believes it has effectively been de-risked even as the fundamental story remains strong. The trade from here should be a lot easier, in his opinion, with shares offering meaningful upside.
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