Kate Spade first quarter sales drop 1,2%
Kate Spade on Tuesday posted unexpectedly weak first quarter earnings, in which net sales fell 1.2% or $3 million to $271 million. First quarter direct-to-consumer same-store sales declined 2.4%, or 8.1% excluding e-commerce.
Same-store sales per square foot for Kate Spade New York stores were $1,516 for the latest twelve months, compared to $1,557 for the twelve month period ended Dec. 31, 2016.
The report also missed expectations in other measures: Q1 net income was $1.36 million, or 1 cent per share, down from $11.6 million, or 9 cents per share, in the year-ago period.
The company said it will forego its conference call with analysts or providing any guidance in light of its continued exploration of strategic alternatives. The handbag and accessories maker has been rumored to be for sale, with Coach and Michael Kors both said to be interested.
More recently, Coach has emerged as the most likely buyer, with analysts estimating that the buyout sum could top $2 billion. But the company’s unexpected first quarter declines could hurt those prospects.
A Kate Spade-Coach merger is far from final: Michael Kors is apparently still interested and may yet swoop in with its own offer in the coming days or weeks, according to press reports.