Last month, it was about margins; this month, it’s about projections, with investors liking what they heard from Kate Spade & Co.

This story first appeared in the November 7, 2014 issue of WWD. Subscribe Today.

Although the company missed Wall Street’s third-quarter consensus estimates, Kate Spade managed to narrow its loss from a year ago and raise its full-year comparable-store sales growth to between 19 and 21 percent from prior forecasts of between 15 and 17 percent.

Investors liked those projections, sending shares of the stock up 17.9 percent, to $30.96, in trading on the New York Stock Exchange.

For the three months ended Oct. 3, the net loss was $9.1 million, or 7 cents a diluted share, from a loss of $16.9 million, or 14 cents, a year ago. On an adjusted basis, the loss from continuing operations was flat, compared with an adjusted loss per share of 5 cents a year ago. Net sales rose 30 percent, to $250.4 million, from $192.6 million. Sales in the quarter were boosted by a 36.4 percent gain in Kate Spade North America and a 32.8 percent increase in Kate Spade International. Direct-to-consumer comps rose 15 percent, representing 21 straight quarters of positive comps. The company increased its gross margin rate to 62.8 percent from 61.4 percent a year ago. Wall Street was expecting 2 cents a share on revenues of $253.9 million.

Craig Leavitt, chief executive officer, said in an interview, “Investors are reacting well to the improvements we made to our gross margin rate [and how we are] bucking the trend of what a lot of companies are releasing this month.”

Leavitt continues to work on expanding product categories and geographic reach as he forges ahead with a goal to grow Kate Spade’s volume to $4 billion at retail. There’s no timetable for when the company might reach that goal, but Leavitt projected that, when it does, Kate Spade International will represent about two-thirds of the firm’s overall business.

Currently, in North America, the company’s most important consumer is the “splurge” customer who “spends more than $500 on one single item, buys multiple items each time she shops and makes multiple purchases throughout the year.” He said its Babe tote, priced at around $1,000, and novelty Birdcage handbag, priced at about $500, are nearly sold out.

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