Kate Spade roundup: Rally after sales pop, brand erosion a concern?

Shares of Kate Spade (KATE +7.3%) carve out a new multi-year high after a bustling Q2 report and a bump in guidance.

The retailer almost doubled up the street estimate for comp growth with its 30.4% mark.

What to watch: Some retail analysts are wary of the heavy level of markdowns and margin compression that Kate Spade had to endure to achieve its sales pop. If the brand slips out of the affordable luxury category, they note that working its way back up could be difficult.

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Comments (3)
  • 11146471
    , contributor
    Comments (1381) | Send Message
    A repeat of the KORS trading session some days ago...What can I say, totally rigged.


    Incredible slump after very good earnings.
    12 Aug 2014, 11:29 AM Reply Like
  • perp123
    , contributor
    Comments (2) | Send Message
    Such behavior, especially the magnitude of the swing, after a blow out quarter certainly leaves one wondering about the game being rigged.
    12 Aug 2014, 12:51 PM Reply Like
  • 11146471
    , contributor
    Comments (1381) | Send Message
    Dear perp123,


    I am a shareholder of KORS (not KATE) and I can assure you that we share the same concerns over the behaviour of our stock holdings...


    KORS had a wonderful Q just like KATE has, and beat expectations by far, although the latest 3-months period (after the previous Q in which it surprised again) many "Kassanders" were seeing ominous signs, from the "erosion of the profit margins due to discount pricing", just like in KATE's occasion.
    12 Aug 2014, 01:04 PM Reply Like
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