Fifth & Pacific 4Q net income drops 75 percent

Fifth & Pacific posts 75 pct drop in 4th-qtr net income hurt by tough comparisons

Associated Press

NEW YORK (AP) -- Fifth & Pacific Cos., a clothing, accessory and fragrance maker whose lines include Kate Spade and Lucky Brand, said Thursday its fourth-quarter net income tumbled 75 percent on tough comparisons to the prior year, which was boosted by a hefty gain on the sale of trademarks.

The company, formerly known as Liz Claiborne Inc., earned $57 million, or 47 cents per share, in the final three months of 2012. That was down from $229.2 million, or $1.91 per share, in the 2011 fourth quarter.

The recent quarter included a $40.1 million gain on the acquisition of a subsidiary, while the year-ago period included a $271.4 million gain on the sale of trademarks. Excluding those and other one-time items, Fifth & Pacific said it posted an adjusted profit from continuing operations of 12 cents per share, up from an adjusted 10 cents per share in the year-ago quarter.

Revenue rose 9 percent to $486.5 million from $447.1 million.

The results fell short of Wall Street predictions. Analysts, on average, expected a profit of 17 cents per share, on $488.9 million in revenue, according to FactSet.

On a comparable basis, the company said its sales rose 14 percent. The figure excludes a $20 million decline in sales related to brands that have been sold or discontinued, but not accounted for as discontinued operations.

The company sells its products in its own stores and through other retailers. Revenue at the company's Kate Spade stores open at least a year jumped 27 percent, while at Lucky Brand stores open at least a year rose 3 percent. But revenue at Juicy Couture brand stores open at least a year decreased 2 percent. The metric is a key measure of a retailer's health, because it excludes stores that recently opened or closed.

For the full year 2012, Fifth & Pacific posted a loss of $74.5 million, or 68 cents per share, compared with a loss of $171.7 million, or $1.35 per share, for all of 2011. Revenue fell to $1.51 billion from $1.52 billion.

Shares of Fifth & Pacific fell 51 cents, or 3 percent, to $16.80 shortly after the market opened. The stock has changed hands between $9.02 and $18.13 in the past 52 weeks.

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