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The company grew worldwide sales by 30% in the third quarter. US sales increased by 36%.
Kate Spade's sales growth is especially impressive because it was achieved without too many promotions or discounts, The Wall Street Journal writes.
The surge comes at a time when competitors like Michael Kors and Coach are struggling to boost sales. The brands have become notorious for discounting, leading to concerns that customers will be unwilling to pay full-price going forward.
Kate Spade lost $9.1 million in the quarter, but had previously warned that margins would be challenged by investments in the Kate Spade Saturday business.
The brand currently has 98 boutiques and 57 outlets.
Kate Spade has the potential to more than double its business to $2 billion in annual sales by the end of 2016, CEO Craig Leavitt told The Business Of Fashion last year.
The brand plans to achieve growth through offering more product categories, such as home goods and stationary, and expanding e-commerce.