Brand ChallengesKate Spade trends remain soft, the brand is a smaller contributor to profitability, and management has already reset expectations as they work through the turnaround.
Profitability ConcernsWeaker-than-expected FY26 profitability outlook was influenced by tariffs, weaker SG&A flow-through, and choppy trends at Kate Spade.
ValuationThe 66% YTD surge in the stock price leaves the shares close to fair value, leading to a downgrade to Neutral.