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Coach Inc. (COH) said that its wholly owned direct subsidiary, Chelsea Merger Sub Inc., has commenced a tender offer for all of the outstanding shares of common stock, par value 1.00 US dollar per share, of Kate Spade & Company (KATE) at a price of 18.50 US dollars per share, net to the seller in cash, without interest thereon and less any applicable withholding taxes.
The tender offer is subject to customary conditions to closing, including a condition that the number of shares validly tendered (and not properly withdrawn) prior to the expiration of the offer, together with the shares then owned by Coach and its wholly-owned subsidiaries, represents at least one share more than 50 percent of all shares then outstanding.
The tender offer will expire at 11:59 p.m. EDT on June 23, 2017, unless extended.
Shares of Sears Holdings (SHLD) have pulled back well off their best levels of the day but remain notably higher in afternoon trading on Thursday. Sears is currently up by 13.1 percent, bouncing off its lowest closing level in well over two months.
The rally by Sears comes after the department store operator reported a narrower than expected first quarter loss on revenues that exceeded estimates. (DPA)
Italian fashion designer Laura Biagiotti, who pioneered the marketing of cashmere products in places such as China and the former Soviet Union, has died aged 73, her company said Friday.
The veteran designer suffered brain damage following a heart attack late on Wednesday, and died early on Friday the AGI agency said.
The Laura Biagiotti brand is known for its fine knitwear and loose clothes as well as perfumes, accessories and watches.
Dubbed the "Queen of Cashmere", her company said it uses 50,000 kilogrammes (110,000 pounds) of the fine soft wool every year to make its clothes.
She was also one of the first to market Western collections to other parts of the world, staging fashion shows in China in 1988 and in the former Soviet Union in 1995.
In a 2015 interview to mark her 50 years in the industry she said that fashion could play a role in changing societies.
"In China, in 1988, we understood that after so many years during which clothing had united, unified women and men, they all wanted to express their own individuality," she told the business newspaper Il Sole 24 Ore.
She began her career in 1965 when she joined her mother Delia, who had just opened a dressmaking business in Rome after having designed uniforms for the crews of the Alitalia airline.
The young Laura launched her first collection in Florence in 1972. Along with a group of other designers, such as Ottavio Missoni and Gianfranco Ferre, she helped move Italy's fashion capital from Florence to Milan.
Since 1980 she had lived and worked in a restored 11th century castle near Rome with her husband Gianni Cigna, who died in 1996. Her daughter Lavinia is the vice president of the group.
She was also known in Italy as a strong supporter of the arts and sponsored the restoration of numerous historic buildings.
The Biagiotti group stages more than 70 shows every year. (AFP)
Fourth quarter net sales at Deckers Brands decreased 2.4 percent to 369.5 million dollars compared to 378.6 million dollars for the same period last year. On a constant currency basis, net sales decreased 1.5 percent. Full year net sales decreased 4.5 percent to 1.790 billion dollars compared to 1.875 billion dollars last year. On a constant currency basis, net sales decreased 4.1 percent.
Commenting on the company’s performance, Dave Powers, President and CEO, said in a statement, "Over the course of the last year, the organization has been hard at work identifying margin enhancing initiatives and detailing plans that significantly improve the profitability of the company. We now anticipate that the 150 million dollars cumulative savings plan announced in February 2017 will drive a 100 million dollars operating profit improvement by fiscal year 2020."
Fourth quarter and full year financial highlights
Gross margin was 43 percent compared to 40.9 percent for the same period last year, while non-GAAP gross margin was 43 percent compared to 42.3 percent for the same period last year due to less domestic promotional activity and supply chain improvements, partially offset by foreign exchange headwinds from the strengthening of the US dollar.
Gross margin for the full year was 46.7 percent compared to 45.2 percent last year. Non-GAAP gross margin was 46.7 percent compared to 45.4 percent last year. Operating loss was 1.9 million dollars compared to 162.1 million dollars last year. Non-GAAP operating income was 165.6 million dollars compared to 195.7 million dollars last year.
Fourth quarter operating loss was 30.9 million dollars compared to 27.9 million dollars for the same period last year. Non-GAAP operating income was 5.1 million dollars compared to 5.7 million dollars for the same period last year. Diluted loss per share was 0.49 dollar compared to 0.73 dollar for the same period last year. Non-GAAP diluted earnings per share were 0.11 dollar compared to 0.11 dollar for the same period last year.
Diluted earnings per share for the year were 0.18 dollar compared to 3.70 dollars last year, while non-GAAP diluted earnings per share were 3.82 dollars compared to 4.50 dollars last year.
UGG brand net sales for the fourth quarter decreased 1.1 percent to 243 million dollars compared to 245.6 million dollars for the same period last year. On a constant currency basis, sales increased 0.2 percent. The company said, decrease in sales was driven by a decrease in domestic wholesale sales, partially offset by an increase in international wholesale and DTC sales. For fiscal 2017, UGG brand sales decreased 4.8 percent to 1.451 billion dollars and on a constant currency basis, sales decreased 4.2 percent.
Teva brand net sales for the quarter decreased 13.3 percent to 51.3 million dollars compared to 59.1 million dollars for the same period last year. On a constant currency basis, sales decreased 13.2 percent. The decrease in sales was driven by a decrease in global wholesale sales, partially offset by an increase in DTC sales. For fiscal 2017, Teva brand sales decreased 11.5 percent to 117.7 million dollars. On a constant currency basis, sales decreased 12.2 percent.
Sanuk brand net sales for the fourth quarter decreased 16.1 percent to 32.3 million dollars compared to 38.5 million dollars for the same period last year on both a reported and constant currency basis. The decrease in sales was driven by a decrease in global wholesale and DTC sales. For fiscal 2017, Sanuk brand sales decreased 13.6 percent to 91.8 million dollars. On a constant currency basis, sales decreased 13.7 percent.
Combined net sales of the company’s other brands for the quarter increased 21.2 percent to 42.9 million dollars compared to 35.4 million dollars for the same period last year. On a constant currency basis, sales increased 22 percent. The increase, the company said, was primarily attributable to a 9.3 million dollars or 32.7 percent, increase in sales for the Hoka One One brand compared to the same period last year. For fiscal 2017, combined sales of the company’s other brands increased 16.2 percent to 129.6 million dollars. On a constant currency basis, sales increased 16.3 percent.
Wholesale net sales for the quarter decreased 5.8 percent to 219.1 million dollars compared to 232.7 million dollars for the same period last year. On a constant currency basis, sales decreased 5.2 percent. For fiscal 2017, wholesale sales decreased 8.7 percent to 1.124 billion dollars, while on a constant currency basis, sales decreased 8.6 percent.
Direct-to-Consumer (DTC) net sales for the quarter increased 3 percent to 150.4 million dollars compared to 145.9 million dollars for the same period last year. On a constant currency basis, sales increased 4.3 percent. DTC comparable sales for the fourth quarter were flat compared to the same period last year. For fiscal 2017, DTC sales increased 3.4 percent to 666.3 million dollars and DTC comparable sales increased 2.6 percent. On a constant currency basis, DTC sales increased 4.5 percent.
Domestic net sales for the quarter decreased 4.3 percent to 230 million dollars compared to 240.4 million dollars for the same period last year. For fiscal 2017, domestic sales decreased 6.4 percent to 1.141 billion dollars. International net sales for the quarter increased 0.9 percent to 139.5 million dollars compared to 138.2 million dollars for the same period last year. On a constant currency basis, sales increased 4.1 percent. For fiscal 2017, international sales decreased 1 percent to 648.8 million dollars. On a constant currency basis, sales increased 1.6 percent.
The company forecasts total sales to reach 2 bn dollars by 2020
In its long-term outlook, the Deckers Brands expects total sales of approximately 2 billion dollars, operating margin of 13 percent and ROIC over 20 percent.
The Company’s fiscal year 2018 outlook includes targeted savings which are expected to result in over 17 million dollars of operating profit improvement. Net sales are expected to be in the range of down 2 percent to flat for FY18, gross margin to be approximately 47.5 percent, non-GAAP diluted earnings per share to be in the range of 3.95 dollars to 4.15 dollars.
Net sales for the first quarter are expected to be up low single digits over the same period last year, and a non-GAAP diluted loss per share of approximately 1.70 dollar to 1.65 dollar compared to a non-GAAP diluted loss per share of 1.80 dollars for the same period last year.
Picture:Deckers Brands website
Caleres first quarter consolidated sales of 631.5 million dollars were up 8 percent including 42.5 million dollars of Allen Edmonds sales. Famous Footwear total sales of 366.5 million dollars, increased 0.5 percent, while Famous.com sales were up 25.7 percent to 5.7 percent of sales. The company’s same-store-sales were however down 0.6 percent.
“Our first quarter results – including 8 percent sales growth and more than 50 basis points of gross margin improvement – provided a solid start to the year, despite the continued tough retail environment,” said Diane Sullivan, CEO, President and Chairman of Caleres in a media release, adding, “We are pleased with the performance of our Allen Edmonds acquisition, the success of our integration to date, and with our continued shift toward more balanced earnings contribution from both Famous Footwear and brand portfolio.”
First quarter brand portfolio sales rise 20.4 percent
Brand portfolio sales of 265 million dollars were up 20.4 percent including contribution from Allen Edmonds, which was acquired in December of 2016. The company said, organic growth was 1.1 percent and ecommerce was up 56.3 percent and represented 25.8 percent of sales.
Gross profit of 270.9 million dollars was up 9.3 percent and gross margin of 42.9 percent was up 52 basis points, while adjusted gross margin of 43.4 percent was up 100 basis points. Net earnings of 14.9 million dollars included 2.5 million dollars after-tax of expected charges related to the acquisition, integration and reorganization of men’s brands, while adjusted net earnings of 17.4 million dollars were down 2 percent. Diluted earnings per share of 0.35 dollar included 0.05 dollar of expected charges related to the acquisition, integration and reorganization of men’s brands, while adjusted diluted earnings per share were 0.40 dollar.
Caleres declares 377th consecutive quarterly dividend
The company declared 377th consecutive quarterly dividend, with 0.07 dollar per share payable on July 1, 2017, to shareholders of record as of June 17, 2017.
“We ended the quarter with cash and equivalents up 29.8 percent from the end of 2016, even as we paid down another 25 million dollars of our revolver borrowings related to our Allen Edmonds acquisition. We expect to pay off the remainder of this amount by the end of the year,” added Ken Hannah, Chief Financial Officer of Caleres.
Abercrombie & Fitch has reported a net loss per diluted share of 0.91 dollar for the first quarter ended April 29, 2017 compared to 0.59 dollar for the first quarter ended April 30, 2016. In addition, the company reported an operating loss of 69.9 million dollars, which included the adverse impact from year-over-year changes in foreign currency exchange rates of approximately 5.3 million dollars, compared to an operating loss of 54.9 million dollars last year.
Commenting on the company’s results, Fran Horowitz, Chief Executive Officer, said in a statement, "We are encouraged by our progress across all brands, particularly in March and April as a whole, in an aggressively promotional environment. While we anticipate the second quarter environment to remain promotional, we expect results to improve further in the second half of the year, as we see returns from our strategic investments in marketing and omnichannel."
First quarter net sales were down 4 percent
Net sales for the first quarter of 661.1 million dollars were down 4 percent over last year, with comparable sales down 3 percent. By brand, net sales for the quarter increased 3 percent to 374.7 million dollars for Hollister and decreased 11 percent to 286.4 million dollars for Abercrombie versus last year.
By geography, net sales decreased 4 percent to 409.1 million dollars in the US and decreased 3 percent to 252 million dollars in international markets versus last year. Direct-to-consumer sales grew to approximately 27 percent of total company net sales for the first quarter, compared to approximately 24 percent of total company net sales last year.
The gross profit rate was 60.3 percent, 130 basis points lower than last year on a constant currency basis, primarily due to lower average unit retail, partially offset by lower average unit cost. Net loss attributable to Abercrombie & Fitch Co. was 61.7 million dollars compared to 39.6 million dollars last year.
Dividend of 0.20 dollar per share approved
As previously announced, on May 19, 2017 the Board of Directors declared a quarterly cash dividend of 0.20 dollar per share on the Class A Common Stock of Abercrombie & Fitch Co, payable on June 12, 2017 to stockholders of record at the close of business on June 2, 2017.
For fiscal 2017, the company expects comparable sales to remain challenging in the second quarter, with trend improvement in the second half of the year, continued adverse impact from foreign currency on sales and operating income, a gross margin rate down slightly to last year's adjusted non-GAAP rate of 61 percent, with continued pressure in the second quarter, net income attributable to non-controlling interests of approximately 4 million dollars.
The company plans to open seven full-price stores in fiscal 2017, primarily in the US. The company also plans to open two new outlet stores. In addition, the company anticipates closing approximately 60 stores in the US during the fiscal year through natural lease expirations.
Shoe Carnival reported net sales of 253.4 million dollars for the first quarter of fiscal 2017, a 2.7 percent decrease, compared to net sales of 260.5 million dollars for the first quarter of fiscal 2016. Comparable store sales decreased 3.9 percent during the quarter.
“While February was a very challenging month due to the delay in the tax refunds, we are encouraged by the improvement in our sales as we progressed through the quarter. Comparable store sales for March and April combined, which includes the shift in the Easter selling season, were up low single digits,” said Cliff Sifford, Shoe Carnival’s President and Chief Executive Officer in a press release.
Q1 net incomes down to 8.2 mn dollars
Gross profit margin decreased to 28.5 percent compared to 29 percent in the first quarter of fiscal 2016. Net income was 8.2 million dollars or 0.48 dollar per diluted share compared to 10.7 million dollars or 0.56 dollar per diluted share for the same quarter last year.
The company expects to open approximately 19 stores and close approximately 18 to 20 stores during fiscal 2017 compared to opening 19 stores and closing nine stores during fiscal 2016.
The company expects fiscal 2017 net sales to be in the range of 1.002 billion dollars to 1.018 billion dollars, with comparable store sales flat to down low single digits. Earnings per diluted share are expected to be in the range of 1.30 dollars to 1.45 dollars compared to 1.28 dollars and adjusted earnings per diluted share of 1.40 dollars last year.
Picture:Shoe Carnival website
For the first quarter of fiscal 2018, Guess recorded GAAP net loss of 21.3 million dollars, a 15.4 percent improvement compared to 25.2 million dollars for the first quarter of fiscal 2017. GAAP diluted loss per share improved 13.3 percent to 0.26 dollar compared to 0.30 dollar for the prior-year quarter. Adjusted net loss was 19.4 million dollars, a 0.5 percent deterioration from 19.3 million dollars for the same quarter of fiscal 2017. Adjusted diluted loss per share deteriorated 4.3 percent to 0.24 dollar from 0.23 dollar for the prior-year quarter.
Commenting on the company’s first quarter trading, Victor Herrero, Chief Executive Officer, said in a statement, "We are pleased to report that our first quarter results finished above the high-end of our expectations for revenues, adjusted operating margin and earnings per share. We continued to see strong performance in our international businesses."
First quarter financial highlights
Total net revenue for the first quarter of fiscal 2018 increased 2.2 percent to 458.6 million dollars compared to 448.8 million dollars in the prior-year quarter. In constant currency, net revenue increased by 4 percent.
Americas retail revenues decreased 14.9 percent in US dollars and 14.7 percent in constant currency. Retail comp sales including e-commerce decreased 15 percent in US dollars and constant currency. Europe revenues increased 23.3 percent in US dollars and 29.1 percent in constant currency. Retail comp sales including e-commerce increased 5 percent in US dollars and 11 percent in constant currency.
Asia revenues increased 16.9 percent in US dollars and 15.5 percent in constant currency, while retail comp sales including e-commerce increased 4 percent in US dollars and 2 percent in constant currency.
Americas wholesale revenues increased 5.7 percent in US dollars and 7.7 percent in constant currency. Licensing revenues decreased 9.3 percent in US dollars and constant currency.
GAAP operating loss improves 11.9 percent
The company said, GAAP operating loss for the first quarter improved 11.9 percent to 25.5 million dollars compared to 29 million dollars in the prior-year quarter. GAAP operating margin improved 90 basis points to negative 5.6 percent, compared to negative 6.5 percent in the prior-year quarter. Adjusted operating loss was relatively flat at 22.8 million dollars and adjusted operating margin was negative 5 percent, an improvement of 10 basis points compared to the same prior-year quarter.
The company's Board of Directors has approved a quarterly cash dividend of 0.225 dollar per share on the company's common stock payable on June 23, 2017 to shareholders of record at the close of business on June 7, 2017.
Guess projects 2 to 4 percent rise in Q2 sales
For the second quarter Guess expects consolidated revenues to improve between 2 to 4 percent or 3.5 percent to 5 percent on constant currency and between 3.5 percent to 5 percent or 4 percent to 5.5 percent on a constant currency basis for the full fiscal year.
GAAP EPS for the quarter is projected to be in the range of 0.08 dollar to 0.11 dollar and 0.32 dollar to 0.42 dollar for the full year. Adjusted EPS is expected to range between 0.08 dollar and 0.11 dollar for the second quarter and 0.34 to 0.44 dollar for the full year.
First quarter revenue at PVH increased 4 percent or 5 percent on a constant currency basis to 2 billion dollars compared to the prior year period. On GAAP basis, EPS was 0.89 dollar compared to the company’s earlier guidance of guidance of 0.73 dollar to 0.75 dollar. Non-GAAP EPS was 1.65 dollars compared to guidance of 1.58 dollars to 1.60 dollars. PVH has now raised full year GAAP EPS expectation to 6.24 dollars to 6.34 dollars from 6.20 dollars to 6.30 dollars previously and non-GAAP EPS outlook to 7.40 dollars to 7.50 dollars from 7.30 dollars to 7.40 dollars previously.
Commenting on these results, Emanuel Chirico, the company’s Chairman and CEO, noted in a press release, “We continue to experience strong momentum in our Calvin Klein and Tommy Hilfiger businesses, which allowed us to exceed both our sales and earnings guidance for the first quarter despite the volatile macroeconomic environment and the highly promotional retail market in the US. We are pleased to increase our earnings guidance for the year despite the volatility that continues to persist in the macroeconomic environment.”
Review of Q1 results across businesses
Revenue in the Calvin Klein business for the quarter increased 5 percent or 6 percent on constant currency basis to 756 million dollars compared to the prior year period, which includes a reduction of approximately $15 million resulting from the November 2016 deconsolidation of the company’s Calvin Klein business in Mexico. Calvin Klein International revenue increased 11 percent or 13 percent on a constant currency basis to 380 million dollars due to continued strength in Europe and China. Calvin Klein International comparable store sales increased 3 percent.
Calvin Klein North America revenue decreased 1 percent to 375 million dollars due to the Mexico deconsolidation and a 5 percent decline in North America comparable store sales. GAAP EBITDA increased to 93 million dollars compared to 90 million dollars in the prior year period.
Revenue in the Tommy Hilfiger business increased 6 percent or 9 percent on a constant currency basis to 842 million dollars. Tommy Hilfiger International revenue increased 15 percent or 19 percent to 524 million dollars driven by positive performance across all channels and markets in Europe, as well as the inclusion of a full quarter of revenue from the China business as a result of the April 2016 acquisition of the 55 percent interest in the company’s former Tommy Hilfiger joint venture in China. Tommy Hilfiger International comparable store sales increased 14 percent.
Tommy Hilfiger North America revenue decreased 5 percent to 318 million dollars due to a reduction of approximately 20 million dollars resulting from the discontinuation of the company’s directly operated womenswear wholesale business in the US and Canada during the fourth quarter of 2016 in connection with the licensing of this business to G-III Apparel Group and a 4 percent comparable store sales decline.
Revenue in the Heritage Brands business for the quarter decreased 3 percent to 391 million dollars, while comparable store sales remained flat.
FY17 revenues expected to rise 3 percent
Revenue in 2017 is projected to increase approximately 3 percent or approximately 5 percent on a constant currency basis as compared to 2016. Negatively impacting revenue in 2017 as compared to 2016 is a reduction in revenue due to the effects of the Mexico deconsolidation and the G-III license. Revenue for the Calvin Klein business is projected to increase approximately 6 percent or approximately 7 percent on a constant currency basis, which includes the negative impact of the Mexico deconsolidation. Revenue for the Tommy Hilfiger business is projected to increase approximately 2 percent or 4 percent on a constant currency basis, which includes the negative impact of the G-III license. Revenue for the Heritage Brands business is projected to be flat compared to the prior year.
The company expects its second quarter 2017 earnings per share results will be negatively impacted compared to the second quarter of 2016 by 0.07 dollar per share related to foreign currency exchange rates due to the stronger US dollar against other currencies in which the Company transacts significant levels of business. Earnings per share on a GAAP basis is projected to be in a range of 1.35 dollars to 1.38 dollars compared to 1.11 dollars in the prior year period. On non-GAAP basis the company projects earnings per share will be in a range of 1.60 dollars to 1.63 dollars compared to 1.47 dollars in the prior year period.
Revenue in the second quarter is projected to increase approximately 5 percent or 7 percent on a constant currency basis compared to the prior year period. Negatively impacting revenue in the second quarter of 2017 as compared to the prior year period is a reduction in revenue due to the effects of the Mexico deconsolidation and the G-III license. Revenue for the Calvin Klein business in the second quarter is projected to increase approximately 6 percent or 8 percent on a constant currency basis, which includes the negative impact of the Mexico deconsolidation. Revenue for the Tommy Hilfiger business is projected to increase approximately 1 percent or 4 percent on a constant currency basis, which includes the negative impact of the G-III license. Revenue for the Heritage Brands business is projected to increase approximately 10 percent, due to a planned shift in the timing of wholesale shipments into the second quarter from the first quarter as compared to the prior year period.
Shares of Abercrombie & Fitch were trading higher Wednesday afternoon on reports that there may be an offer for the teen retailer. Its competitor American Eagle Outfitters and private-equity company Cerberus are reported to be working on a takeover bid.
According to Dow Jones, A&F’s rival American Eagle Outfitters would have joined forces with Cerberus to approach Abercrombie with a takeover offer.
The ‘Wall Street Journal’ highlighted the compelling aspects of a potential joint Cerberus-AEO approach given the investment firm’s power and the apparel retailer’s ability to generate synergy savings from the deal. Express is also thought to have joined the race for the once favourite teen fashion brand.
American Eagle Outfitters and Express, the likely buyers
Sources close to the matter however cautioned that there is no guarantee that the group would make a bid.
Earlier this month, Abercrombie & Fitch made it to the news as it was said to have hired investment bank Perella Weinberg Partners to handle potential takeoverapproaches. However, today there is no certainty that any deal will occur, the sources added.
Market experts pointed out back then that as A&F's stock trades at a 17-year low, it has become a vulnerable acquisition target. At Wednesday’s close, the company’s market value stands at 860.1 million dollars. The stock enjoyed this week’s brief rally, although still down nearly 48 percent over the last year.
Photo:Sea & Be Seen, Swimwear Collection, Abercrombie U.S. Web