Mizuho Securities Reiterates Buy as Kate Spade & Co. (KATE) Management is 'Pleased with Momentum Thus Far'
Mizuho Securities reiterated a Buy rating and $25.00 price target on Kate Spade (NYSE: KATE) following the company's 4Q earnings report. KATE reported OpEPS of $0.32, ahead of Mizuho's $0.25 estimates. Management cited they were “pleased with momentum thus far in 2016” as guidance for +L-Mteens comps and gross margin improvement in FY16 suggests further outperformance relative to its handbag peers.
Analyst Betty Chen commented, "With a 4Q beat and guidance for +DD FY16 comps, we continue to recommend KATE shares as results demonstrate KATE’s ability to gain market share despite increased focus on quality of sale and reduced promotions. The company expects further topline and margin improvement in FY16 from growing brand awareness, strong sell-through online/Internationally, and category expansion garnering new shoppers. Our confidence in the company’s ongoing growth stems from our recent survey whereby Millenials cited KATE as #1 preferred brand for their handbag and accessories spending in 2016."
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Shares of Kate Spade closed at $19.82 yesterday.