Why Kate Spade (KATE) Stock Is Soaring Today

NEW YORK (TheStreet) -- Shares of Kate Spade & Co. (KATE) are climbing higher by 6.90% to $31 at the start of trading on Wednesday, as the stock starts to rebound from Tuesday afternoon’s dramatic sell-off.

The designer and marketer of retail based clothing and accessories saw its stock decline in afternoon trading yesterday after the company expressed concerns regarding thinning margins, the Wall Street Journal reported.

The company closed down -25% on Tuesday.

Analysts polled by Thomson Reuters expected the company to report break even earnings.

Net sales grew 48.7% to $266 million, from $179 million over 2013’s second quarter.

Analysts were expecting revenue of $237.83 million.

Separately, TheStreet Ratings team rates KATE SPADE & CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate KATE SPADE & CO (KATE) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, premium valuation and weak operating cash flow."

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

KATE Chart KATE data by YCharts

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE

If you liked this article you might like

Here's Why Coach Shares Are Falling After a Nice Earnings Beat

Coach Stock Gains 2% on Oppenheimer Optimism

Jobs Number Lifts Wall Street While Tech Gives Nasdaq a Boost