Yahoo Finance Buckingham Research Rated Kate Spade & Company as a ‘Buy’
Yesterday’s Consumer Pops and Drops: TSN, MO, DLPH, and KATE
Price movement of Kate Spade & Company
Kate Spade & Company (KATE) has a market cap of $3.3 billion. KATE rose by 5.2% to close at $24.87 per share as of April 13, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.40%, 3.3%, and 40.0%, respectively, on April 13. This means that KATE is trading 1.3% above its 20-day moving average, 15.3% above its 50-day moving average, and 25.3% above its 200-day moving average.
Related ETF and peers
The Vanguard Small-Cap ETF (VB) invests 0.14% of its holdings in KATE. The ETF tracks the CRSP US Small Cap Index. The market-cap-weighted index includes the bottom 2%–15% of the investable universe. The YTD price movement of VB was 0.54% as of April 12, 2016.
The market caps of KATE’s competitors are as follows:
Gap (GPS): $11.1 billion
Coach (COH): $11.3 billion
Fossil Group (FOSL): $2.1 billion
Buckingham Reasearch initiated KATE coverage
Buckingham Reasearch has initiated the coverage of Kate Spade & Company with a “buy” rating.
Performance of Kate Spade & Company in 4Q15 and 2015
Kate Spade & Company reported fiscal 4Q15 net sales of $429.0 million, a rise of 7.6% compared to net sales of $398.6 million in fiscal 4Q14. Sales from Kate Spade’s North America segment rose by 13.7% and sales from its International and Adelington Design Group segments fell by 13.3% and 53.4%, respectively, in fiscal 4Q15, compared to fiscal 4Q14. The company’s cost of goods sold as a percentage of net sales fell by 5.7%, and its operating income rose by 57.1% in fiscal 4Q15 compared to fiscal 4Q14.
Its net income and EPS (earnings per share) fell to $61.5 million and $0.48, respectively, in fiscal 4Q15, compared to $126.5 million and $0.99, respectively, in fiscal 4Q14.
Fiscal 2015 results
In fiscal 2015, KATE reported net sales of $1,242.7 million, a rise of 9.1% YoY (year-over-year). It reported a loss on settlement of notes receivable of $9.9 million in fiscal 2015. Its net income and EPS (earnings per share) fell to $17.1 million and $0.13, respectively, in fiscal 2015, compared to $159.2 million and $1.25, respectively, in fiscal 2014.
KATE’s cash and cash equivalents and inventories rose by 61.9% and 21.3%, respectively, in fiscal 2015. Its current ratio rose to 2.3x and its long-term debt-to-equity ratio fell to 1.6x in fiscal 2015, compared to a current ratio and a long-term debt-to-equity ratio of 1.9x and 2.0x, respectively, in fiscal 2014.
Projections
The company has made the following projections for fiscal 2016:
net sales in the range of $1.39 to $1.41 billion
adjusted EBITDA in the range of $257 million to $282 million
EPS in the range of $0.70 to $0.80
capital expenditures in the range of $65 million to $70 million
planned net new store openings in the range of 40 to 45
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