Earnings Preview: Liz Claiborne

| About: Kate Spade (KATE)

Liz Claiborne (LIZ) is expected to report Q3 earnings before the market open on Wednesday, November 4 with a conference call scheduled for 10 am ET.


Analysts are looking for a loss of (20c) on revenue of $798.86M. The consensus range is (29c)-(10c) for EPS, and revenue of $773.7M-$830M, according to First Call. In August, the company said it expected a same store sales decline for the quarter in the 15%-25% range for the Juicy Couture, Lucky Brand and Kate Spade brands. CEO William McComb said he expected Q4 comps to improve and said he anticipates sequential improvement in 2H results. In September, the CEO hinted at a possible bottoming of the company's performance.

Analyst Views

Goldman Sachs analyst Benjamin Rowbotham said that improving Q4 gross margins, aggressive cost reduction efforts, improving Liz Claiborne outlet trends, and easier same store sales comparisons "all point to a potentially better 2010 outlook." The company announced plans in October to pull its namesake brands out of Macy's (NYSE:M) and other department stores. It said the main brands will next fall be sold exclusively at JC Penney (NYSE:JCP). Its wholesale business is expected to report an adjusted profit next year as a result of the move. Analyst Rowbotham expects fundamentals to improve in 2H09 and 2010, but said the pace and magnitude of upward EPS revisions could slow.

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Tagged: , Textile - Apparel Clothing, Earnings
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