NEW YORK (TheStreet) -- Kate Spade  (KATE) stock is increasing by 2.77% to $17.07 in afternoon trading on Tuesday, after the handbag maker's competitor reported better than expected earnings for the fiscal 2016 second quarter.

Before the market open this morning, Coach (COH) posted earnings of 68 cents per share, beating estimates by 1 cent for the quarter ended December 26.

The quarter included the holiday season, which was somewhat difficult for retailers.

North American comparable store sales for the core Coach brand were down 4%, but it was an improvement compared with a 9.5% decline for the previous quarter.

"We... think stabilization of at Coach could be a positive read-through to Kate Spade," Cowen analysts said in a note, according to Barron's.

New York-based Kate Spade is expected to see a 10.8% increase in net sales for its fiscal 2015 fourth quarter. The company's latest financial report is estimated to be announced in early March.

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Separately, Kate Spade has a "hold" rating and a letter grade of C at TheStreet Ratings because of its net income and revenue growth, notable return on equity, higher debt management risk, and disappointing stock performance.

You can view the full analysis from the report here: KATE

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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