UPDATE 2-Liz Claiborne posts smaller loss, sees Q4 gains

* Q3 adj shr loss $0.04 vs Street view loss $0.03

* Sales $658.3 mln misses Street view $675.8 mln

* Sees positive Q4 sales comps at several brands

* Q3 gross margins higher than expected

* Shares up 12.4 percent
(Recasts first sentence, adds CEO, analyst comments, details,
background, stock action, byline)

By Ben Klayman

DETROIT, Nov 4 (BestGrowthStock) – Liz Claiborne Inc (LIZ.N: ) on
Thursday reported a narrower third-quarter loss on strong
growth of gross margins and forecast positive sales at
established stores in the fourth quarter, sending shares up
more than 12 percent.

The company, owner of the Juicy Couture, Lucky Brand, Kate
Spade and Mexx chains, has been making a major push to
restructure itself by closing underperforming stores and brands
and by spending more on marketing.

Tim Ghriskey, chief investment officer with Solaris Asset
Management, said the results and outlook showed those efforts
were on track.

“Despite a slightly weak quarter, there were signs of
progress,” said Ghriskey, who previously owned Liz Claiborne
shares and still follows the company. “The good news was the
gross margins were up more than expected and that shows good

The gross profit margin as a percentage of sales was 51.3
percent, and analysts were expecting slightly below 51 percent,
Ghriskey said.

He also pointed to an 18.6 percent gain in same-store sales
at Kate Spade’s company-operated stores during the quarter and
more sales of high-margin items like expensive handbags.

Chief Executive William McComb said on a conference call
that the company remains cautious because of the weak economy
but expects same-store sales at its Juicy Couture, Lucky, Kate
Spade and Mexx brands to grow in the fourth quarter.

He affirmed a prior forecast for second-half results,
including a decline in sales of 9 percent to 14 percent and an
improvement in gross margin of 500 basis points or more. He
also said the company can still hit its year-end 2012 threshold
goal of adjusted earnings per share of $1 or more.

Gross margin in the fourth quarter will be greater than it
was last year, but the gain will not be as large as the 631
basis points added in the third quarter due to heavier
promotional spending, the company said.

The company reported a third-quarter net loss of $62.7
million, or 67 cents a share, compared with a net loss of $90.5
million, or 96 cents a share, a year earlier.

However, excluding one-time items, the loss was 4 cents a
share, according to the company and two analysts. That loss is
1 cent more than estimated by analysts polled by Thomson
Reuters I/B/E/S had expected.

The quarter included a loss of 20 cents a share related to
changes in foreign currency (Read more about trading foreign currency. exchange rates on the company’s

Sales fell 13.6 percent to $658.3 million, short of the
$675.8 million analysts had expected.

The decline was largely driven by the transition of its
namesake Liz Claiborne brands to a licensing model under deals
with department store chain J.C. Penney Co Inc(JCP.N: ) and
shopping network QVC.

Shares of Liz Claiborne were up 12.4 percent, or 77 cents,
at $7.00 in afternoon trading on the New York Stock Exchange.
(Additional reporting by Phil Wahba in New York; Editing by
Derek Caney and Steve Orlofsky)

UPDATE 2-Liz Claiborne posts smaller loss, sees Q4 gains