Shares of Kate Spade surged nearly 11 percent Tuesday, after the handbag maker reported fourth-quarter sales growth that easily outpaced competitors Michael Kors and Coach, as well as the broader handbag market.
More importantly, the company logged a 14 percent sales gain despite pulling back on the number of promotions it ran during the holiday period, showing consumers were willing to pay full price for its products.
Despite lapping last year's higher level of discounting, Kate Spade CEO Craig Leavitt said wholesale shipments and sales in its anchor handbag category increased by double digits.
The company also logged better-than-expected sales in its online segment, even as it reduced the number of flash sales it ran. Combined, these two initiatives helped boost the brand's gross margin by 2.5 percent.