...Continued Strong Comps Growth: Kate Spade & Company's comparable store sales (comps) including e-commerce moderated to the midsingle-digit level in the past two quarters from double digit growth previously. Fitch Ratings expects comps to be in the 8%¡9% range in 2016, with midsingle-digit growth thereafter. Comps were affected by a decline in U.S. tourist traffic related to the stronger dollar, although Kate Spade's sales trend is substantially above its larger peers in the entry luxury accessories/apparel space. Margin Benefits from Premium Focus: Since shedding its lower margin brands (Liz Claiborne/Juicy Couture) in 2013, Kate Spade's EBITDA margin expanded to approximately 16.5% in 2015 from 7.7% in 2013, and grew to 18.3% for the LTM ending Oct. 1, 2016. Fitch believes the focus on the premium kate spade new york brand will allow EBITDA margin to sustain in the 18%¡19% range. International operations should also positively affect margins as that segment matures and contributes more...
