Things move fast in the handbag business.
Kate Spade & Co (KATE). went from darling to disappointing in a matter of hours Tuesday morning.
The lifestyle company known for its signature handbags said net sales surged nearly 50% in the second quarter, a strong signal that Kate Spade is "in" among consumers.
The news sent shares up 10% in the morning -- the highest the stock had traded since 2007.
But shares abruptly sold off after Kate Spade executives said on a conference call that promotions would continue to weigh on the company's profit margins this year. In other words, consumers are coming, but largely because of the discounts.
Shares plunged more than 25%, erasing all of its gains for the year.