US: Juicy Couture weighs on Liz Claiborne Q1
- Q1 loss narrowed to $61m from $96m
- Total sales fell 4.1% to $317.1m
- Gross profit margin rose to 56.5% from 53.3%
Strong demand for its Lucky Brand and Kate Spade lines have helped apparel maker Liz Claiborne Inc narrow its first-quarter losses, but its largest brand, Juicy Couture, continues to weigh on its fortunes.
The business, which changes its name to Fifth & Pacific Companies in May, saw its net loss in the three months to 31 March narrow to $61m or $0.60 per share, compared with a loss of $96m or $1.02 per share in the same period last year. Adjusted loss from continuing operations was $0.22 per share, down from a loss of $0.32 a year earlier.
The company has sold off most of its brands - including its namesake Liz Claiborne label to retailer JC Penney - to focus on growth opportunities for Juicy Couture, Lucky Brand and Kate Spade.
Total sales from continuing operations fell 4.1% to $317.1m with Lucky Brand up 20.3% to $100m and Kate Spade surging 45.9% to $86m. These gains, however, were offset by a 4.4% drop in net sales to $110m at its largest brand, Juicy Couture; and a 72.4% drop to $53m at the former Partnered Brands segment which is now called Adelington Design Group & Other.
Higher full price and direct-to-consumer sales, partially offset by the impact of higher raw material costs, helped gross profit margin rise to 56.5% from 53.3%.
"We are encouraged by the prospects for these three brands [Juicy Couture, Lucky Brand and Kate Spade] as they execute their growth strategies," said CEO William McComb.
"Spring and early summer merchandise continue to perform well overall on both the net sales and gross margin lines compared to spring and early summer merchandise in the year ago period, with inventory levels down significantly to last year."
Despite higher sales, Lucky Brand posted an operating loss of $15m in the quarter, but Kate Spade doubled its operating income to $4m. Losses at Juicy Couture widened to $14m.
But the company reaffirmed its full-year adjusted earnings before interest, tax, depreciation and amortization of between $125m and $140m.
Ken Hannah, chief financial officer of JC Penney, has reiterated that the US department store remains committed to its ongoing transformation, including the implementation of its in-store shops....
US fashion firm Fifth & Pacific has lowered its full-year profit target after struggling to sell enough of its Juicy Couture products at full-price....
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