Critical Comparison: Saks (SKS) & Kate Spade & Co (KATE)

Saks (NYSE: SKS) and Kate Spade & Co (NYSE:KATE) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Earnings & Valuation

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This table compares Saks and Kate Spade & Co’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Saks N/A N/A N/A $0.27 0.93
Kate Spade & Co N/A N/A N/A $1.10 16.81

Saks is trading at a lower price-to-earnings ratio than Kate Spade & Co, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Saks and Kate Spade & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Saks N/A N/A N/A
Kate Spade & Co 0.44% 1.11% 0.43%

Analyst Ratings

This is a breakdown of recent recommendations for Saks and Kate Spade & Co, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Saks 0 0 0 0 N/A
Kate Spade & Co 0 9 0 0 2.00

Kate Spade & Co has a consensus price target of $19.50, indicating a potential upside of 5.46%. Given Kate Spade & Co’s higher possible upside, analysts clearly believe Kate Spade & Co is more favorable than Saks.

Insider & Institutional Ownership

97.9% of Kate Spade & Co shares are held by institutional investors. 0.8% of Kate Spade & Co shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Kate Spade & Co beats Saks on 8 of the 8 factors compared between the two stocks.

About Saks

Saks Incorporated is a department store retailer. The Company, and its subsidiaries, is engaged in the operation of Saks Fifth Avenue (SFA) stores and SFA e-commerce operations (Saks Direct), as well as Saks Fifth Avenue OFF 5TH (OFF 5TH). The Company is an omni-channel luxury retailer offering an assortment of fashion apparel, shoes, accessories, jewelry, cosmetics, and gifts. SFA stores are principally free-standing stores in exclusive shopping destinations or anchor stores in upscale regional malls. Customers may also purchase SFA products online at saks.com or by catalog. OFF 5TH stores are primarily located in upscale mixed-use and off-price centers and offer luxury apparel, shoes, and accessories. As of January 28, 2012, the Company operated 46 SFA stores with a total of approximately 5.5 million square feet and 60 OFF 5TH stores with a total of approximately 1.7 million square feet. In November 2013, Hudson’s Bay Company acquired Saks Incorporated.

About Kate Spade & Co

Kate Spade & Company is engaged in the design and marketing of a range of accessories and apparel. It operates through three segments. The KATE SPADE North America segment consists of the Company’s kate spade new york and JACK SPADE brands in North America. The KATE SPADE International segment consists of the Company’s kate spade new york and JACK SPADE brands in international markets, which operates principally in Japan, Asia (excluding Japan), Europe and Latin America). The Adelington Design Group segment primarily consists of exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands. In addition, the Adelington Design Group segment serves J.C. Penney Corporation, Inc. (JCPenney) through exclusive supplier agreements for the LIZ CLAIBORNE and MONET jewelry lines. As of December 31, 2016, it operated 98 the United States Specialty Retail Stores; 35 Foreign Specialty Retail Stores; 65 the United States Outlet Stores; 17 Foreign Outlet Stores, and 54 Concessions.

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