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Reported net sales climb 14.2% at Kate Spade in Q1FY15
11
May '15
On a reported basis, net sales at apparel retailer and NYSE listed Kate Spade & Company climbed 14.2 per cent year over year for the first fiscal quarter ended April 4, 2015.

Reported net sales for the first quarter of fiscal 2015 were $255 million, an increase of $32 million, or 14.2 per cent from the comparable 2014 period.

However, net sales for the first quarter of fiscal 2015, excluding sales for wind-down operations, were $240 million, up $53 million, or 28.4 per cent as against the first quarter of fiscal 2014.

According to a Kate Spade press release, these figures however, exclude impacts of the 53rd week, changes in foreign currency exchange rates and the 2015 strategic initiatives.

First quarter of fiscal 2015 direct-to-consumer comparable sales growth stood at 9 per cent or 6 per cent excluding ecommerce over the previous fiscal first quarter.

Gross profit as a percentage of net sales was 62 per cent, excluding the impact of wind-down operations and was favourably impacted by timing.

On a reported basis, gross profit decreased to 60.6 per cent in the first quarter of fiscal 2015 compared to 61.2 per cent in the comparable fiscal 2014 period.

SG&A expenses stood at $137 million or 57.4 per cent of net sales, excluding the results of wind-down operations and expenses associated with streamlining activities.

SG&A in the reporting quarter also includes a $26 million charge to terminate contracts with the Company's former joint venture partner in China.

On a reported basis, SG&A expenses expanded to $192 million or 75.1 per cent of net sales in the first quarter of 2015 from $164 million or 73.2 per cent of net sales in the first quarter of fiscal 2014.

Loss on settlement of note receivable was $10 million in the first quarter of 2015 and represented a prepayment discount on the seller note receivable the Company received in connection with the sale of Lucky Brand.

Interest expense, net declined to $3 million in the first quarter of fiscal 2015 as against $10 million in the first quarter of 2014.

Net debt too dipped steeply to $199 million at the end of the first quarter of fiscal 2015 from $267 million from the prior fiscal first quarter, mainly due to prepayment of the Lucky Brand seller note.

CEO Craig Leavitt said, "Our channel-agnostic approach and emphasis on improving quality of sale continue to drive brand awareness, customer engagement and product demand."

"Looking ahead, we will continue to focus on driving profitability, accelerating growth across geographies and product categories and broadening our customer base,” he added.

“We are confident in the strength of our business model and are making significant progress toward becoming a $4 billion business at retail," Leavitt observed. (AR)

Fibre2fashion News Desk - India

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