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Kate Spade & Co reported quarterly sales that were better than had been expected at its established stores, boosted by the demand in its kate spade new york handbags as well as accessories.
Stock at Kate Spade, known for colorful and quirky totes and satchels, rose by up to 6.7% in early Tuesday trading.
The company has focused on its brand kate spade new York while investing the company’s online business, strategies analysts have said helped the business fight effects of drops in the overall handbag market across North America.
Kate Spade also has expanded its own flagship line now that includes children’s products and home décor, from kids apparel and purses to rugs and furniture.
The new products across its flagship line help continue the company to continue acquiring new customers, said Craig Leavitt the CEO on a call with Wall Street analysts.
Sales growth at same-stores contrasted with that of its larger rivals such as Michael Kors and Coach, both reported a drop in sales at same-stores in the holiday shopping quarter.
On retail analyst said that Kate Spade now has brand uniqueness and clarity that is lacking at this point in brands like Michael Kors and Coach.
Because of the brand awareness, customer traffic is pulled into stores easier and products can be sold at higher price points, without the need for deep discounts just to move stock, added the analyst.
The company said that it expected sales at same stores to expand as high as the mid teens percentage wise. Analysts have forecast 10.6% growth in same stores.
Excluding certain items, the company’s earnings per share were 32 cents, which matched estimates of analysts.
Net sales increased by 7.6% to over $429 million, which missed the estimates of analysts calling for $441.5 million.
The company, which expanded in 2015 to eight countries, announced it would open locations in India through its agreement India’s Reliance Brands, a unit of Reliance Industries Group.