UPDATE 2-kate spade lifts Liz Claiborne's sales
* Q1 loss from cont ops 22 cts/shr vs view 14 cts/shr
* Net sales slip 4.1 pct, Juicy net sales drop 4.4 pct
* Gross margin up 3.2 points at 56.5 pct of sales
* Shares rise 3.2 pct
By Phil Wahba
April 26 (Reuters) - Liz Claiborne Inc on Thursday reported stronger-than-expected quarterly sales on big gains at its kate spade high-end brand and as declines moderated at its biggest brand of Juicy Couture.
Total sales from continuing operations fell 4.1 percent to $317.1 million during the quarter that ended March 31 for the clothesmaker and retailer.
But that was good enough to beat Wall Street estimates of $307.3 million, according to Thomson Reuters I/B/E/S.
Shares rose 3.2 percent to $13.08 in morning trading.
Claiborne's only profitable brand, kate spade, saw sales rise 45.9 percent, while the unit's profit doubled during the quarter.
kate spade stores generate sales of $1,000 per square foot, about 50 percent more than at Juicy. For the year, Claiborne expects kate spade's comparable sales to rise by a "high teens" percentage, according to a slide that accompanied a call with analysts.
The rise in sales of that upscale brand lifted Claiborne's overall gross margin 3.2 points to 56.5 percent, in much the same way Jones Group's Kurt Geiger luxury shoes raised that company's margins in the first quarter.
Luxury brands find it easier to sell at full price as their shoppers tend to be less sensitive to high prices.
In the last few years, Liz Claiborne sold off many brands, including its namesake, to lessen its debt load and to focus on the units in which it sees the most potential.
The company, which is changing its name to "Fifth & Pacific Cos" in May, reiterated its earlier forecast for 2012 earnings of between $125 million and $140 million before interest, taxes, depreciation and amortization.
Sales at Lucky Brand, now almost as big a brand as Juicy, were up 20.3 percent but the division nonetheless still posted a loss of $15.4 million.
Net sales at Juicy, once a hot brand beloved for its velour track suits with an urban look, fell 4.4 percent while the division's operating loss more than tripled. Clothes sold well but accessories, such as handbags, languished.
The company reiterated its forecast that Juicy's comparable sales would be up 10 percent in the second half of 2012. But the brand's troubles continued in April, with comparable sales down 10 percent so far this month, according to a company presentation.
Juicy took a hit from slower business at its own stores and a fall in sales of non-clothing items at other retailers that carry the brand.
But the declines at Juicy Couture have been moderating in part because it is offering fewer discounts. Chief Executive William McComb told analysts in February that Juicy's sales would improve in the second half of 2012.
Claiborne reported a first-quarter net loss of $60.6 million, or 60 cents a share, compared with a year-earlier loss of $96.3 million, or $1.02 a share.
Including only continuing operations, Claiborne had a loss of 22 cents per share, narrower than 32 cents a year earlier, but steeper than the 14 cents analysts had forecast.
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