* 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 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
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
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
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.