GO
Loading...

Fifth & Pacific down after full-year guidance cut

NEW YORK -- Shares of Fifth & Pacific slid Tuesday after the clothing maker cut its guidance due to weak sales of Juicy Couture.

THE SPARK: Fifth & Pacific Cos. lowered its profit outlook for the year late on Monday. It is trying to turn around its Juicy Couture label, its largest division. But the company reported that its Kate Spade and Lucky Brands are doing better than anticipated.

THE BIG PICTURE: The New York-based clothing and accessories company, formerly known as Liz Claiborne Inc., reports third-quarter results after the market closes on Tuesday. The company changed its name in January, after it sold off its Liz Claiborne and Monet brands to J.C. Penney Co. to focus on Juicy Couture, Lucky Brand and Kate Spade.

Moody's Investors Service said the guidance cut is bad for Fifth & Pacific's credit, but said it is not making any immediate changes to its ratings. Moody's currently has a "B2" rating on Fifth & Pacific. That rating is "junk" status, five notches below investment grade.

ANALYSIS: KeyBanc Capital Markets analyst Edward Yruma now expects a loss for this year and cut his earnings estimate for next year, but kept a "Buy" rating on shares. He remains optimistic about the stock, in part because he believes the company could still make big changes if its turnaround efforts don't work.

SHARE ACTION: Down $1.46, or 11.4 percent, to close at $11.31. The stock had been up 48 percent since the beginning of the year.