Kate Spade share price rises after fashion company reports strong sales for final quarter of year ended 2 January 2016 and announces expansion into India
Share price in Kate Spade rose today after the company reported strong sales for its final quarter of its financial year, although its net income fell.
The fashion company, which is particularly well-known for its handbag designs, reported net sales for the 52 weeks ending 2 January 2016 of $1.2bn (£860m), up 9.1 per cent from $1.1bn the year before. Net sales during the company's fourth quarter were $429m, up 7.6 per cent from $398.6m in the prior year.
However, the company's net income dipped for both periods. Net income for the full year was reported as $17.1m, down from $159.2m, while net income for the fourth quarter was $61.5m, down from $126.5m, as the company wound down a handful of brands during 2015.
Shares in the company were trading up 10.3 per cent at $21.86 shortly after 1pm New York time.
"In 2015, we became a stronger, refocused Kate Spade & Company," remarked Craig A. Leavitt, chief executive of Kate Spade. "We made significant progress along our two axes of growth – product category and geographic expansion – introducing 14 new product categories and entering eight new countries."
Commenting on the year ahead, Leavitt added: "Looking ahead, we will harness the powerful momentum we created in 2015 to drive Kate Spade & Company's growth across our four category pillars – women's, men's, children's and home. As we enter 2016, we are well-positioned for sustainable long-term growth."
The company also revealed today that it would be expanding into India via a partnership with Reliance Industries.
"Expanding into India is an important next step for Kate Spade & Company as we continue to progress along our geographic expansion axis of growth and build global brand engagement," said Leavitt. "With India's rapid development and increasingly aspirational consumers, we see significant growth opportunities in the region in the long term."