Shares for Kate Spade & Co. rallied in early morning trading after the company confirmed, following months of speculation, that it is indeed on the selling block.
In conjunction with its fourth-quarter earnings announcement today — which saw the firm beat profit estimates but land slightly below revenue forecasts — Kate Spade said that it’s conducting a process to explore and evaluate strategic alternatives. The company has enlisted Perella Weinberg Partners as its financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison as its legal counsel.
As of 10:30 a.m. ET, Kate Spade shares remained up nearly 10 percent, to $21.58.
The company also said its fourth quarter net income advanced 39 percent year-over-year, to $86 million, or 67 cents per diluted share. Adjusted diluted earnings per share, at 41 cents, topped market watchers’ predictions of 35 cents.
Fourth-quarter revenues — which grew 20 percent year-over-year, to $471 million — were shy of analysts’ bets for revenues of $473 million.
“Our solid fourth quarter and fiscal year performance demonstrate the strength of our differentiated business model, as we continued to gain market share and deliver strong growth despite a challenging retail environment,” Kate Spade CEO Craig Leavitt said in a release. “In 2016, we further strengthened our handbag portfolio, introduced new categories to our casual ready-to-wear classifications, and thoughtfully expanded our global store base, opening 52 net new owned and partner-operated stores.”
Full-year revenues for the firm were $1.4 billion, a 17 percent gain year-over-year. Net income was $154 million, or $1.17 on a reported basis and 70 cents on an adjusted basis.
In lieu of its pursuit of strategic alternatives, Kate Spade management did not provide any forward looking guidance.