NYSE-listed, Kate Spade & Company which manages fashion brands like, kate spade new york, Kate Spade Saturday and Jack Spade reported a 48.7% year-on-year jump in net sales from continuing operations in the second quarter of 2014.
Net sales from continuing operations at Kate Spade & Company for the second quarter of 2014 were $266 million, a rise of $87 million or 48.7% from the second quarter of 2013. Kate Spade said this reflects increases in the Kate Spade North America and Kate Spade International segments.
During the second quarter of 2014, Kate Spade disaggregated its former Kate Spade reportable segment into two reportable segments, Kate Spade North America and Kate Spade International.
However, gross profit as a percentage of net sales decreased to 58.6% in the second quarter of 2014, compared to 61.8% in the comparable 2013 period, reflecting the impact of off-price sales margin, primarily driven by the Kate Spade Saturday brand, due to excess inventory and raw materials disposal that arose in connection with balancing consumer demand with inventory buys in the launch year.
Selling, general & administrative expenses (SG&A) went up by $32 million, or 27.8%, to $146 million in the second quarter of 2014 compared to the second quarter of 2013. SG&A as a percentage of net sales was down to 54.9% in the second quarter of 2014, compared to 63.9% in the second quarter of 2013.
Operating income stood at $10 million or 3.7% of net sales in the second quarter of 2014 compared to operating loss of $4 million or 2.1% of net sales in the second quarter of 2013.
Other income was $0.2 million in the second quarter of 2014, compared to a loss of $0.8 million in the second quarter of 2013, and included foreign currency transaction gains and losses and equity in losses of its equity investee.
Interest expense fell to $6 million in the second quarter of 2014, compared to $12 million in the second quarter of 2013. Kate Spade made a provision for Income Taxes at $1 million in the second quarter of 2014.
Loss from continuing operations in the second quarter of 2014 stood at $14 million, or a negative $0.11 per diluted share, against a loss of $24 million, or a negative $0.20 per share in the second quarter of 2013.
Adjusted earnings per share from continuing operations in the second quarter of 2014 were $0.05, compared to adjusted loss per share of $0.08 in the second quarter of 2013.
Net loss in the second quarter of 2014 stood at $4 million, which is inclusive of income related to discontinued operations of $10 million, compared to net loss of $43 million, which is inclusive of a loss related to discontinued operations of $20 million in the second quarter of 2013.
This resulted in a net loss per share of $0.03 in the second quarter of 2014, compared to a loss per share of $0.36 in the second quarter of 2013.
