Ralph Lauren Beats Q2 Expectations and Raises Outlook on Momentum

by · WWD
Ralph LaurenDominique Maitre/WWD/Shutterstock

Ralph Lauren Corp. continued to gain ground in its fiscal second quarter. 

Net income increased slightly to $147.9 million, or $2.31 a diluted share, from $146.9 million, or $2.19, a year earlier as the company bought back stock and paid dividends worth a combined $375 million.

Adjusted earnings per share grew 21 percent to $2.54 — 13 cents ahead of the $2.41 analysts had penciled in, according to Yahoo Finance. 

Wall Street reacted immediately, sending shares of the company up 8.4 percent to $225.50 in premarket trading on Thursday.

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Revenues for the quarter ended Sept. 28 increased 6 percent to $1.7 billion from $1.6 billion. Comparable sales in the company’s direct-to-consumer business grew 10 percent, with retail comp increases across all of its regions. 

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The firm said it brought in 1.5 million new customers and increased average unit retail prices by 10 percent, both in its direct to consumer business.

Revenues in North America rose 3 percent to $739 million while Europe was up 7 percent to $566 million and Asia was ahead 9 percent to $380 million.

All of that has Ralph Lauren sticking to the approach that helped it build what it describes as its “fortress foundation.”

Patrice Louvet, president and chief executive officer, told WWD in an interview that, while the luxury market has been challenged, “we’re really happy to say that you can count on Ralph Lauren to consistently perform.”

Louvet said the quarter’s results gave the company confidence to raise its outlook for the full year.

Ralph Lauren raised its annual revenue outlook to a gain of 3 percent to 4 percent in constant currencies, up from the 2 percent to 3 percent increase seen in August.

“We’re raising it now, even though we haven’t gone through holiday yet, which gives you a sense of the momentum and confidence that we have going into holiday,” Louvet said. 

In short, the company is sticking to the playbook that made it a branded powerhouse while it flexes with the times.

Ralph Lauren, executive chairman and chief creative officer, said: “A spirit of optimism and the easy elegance of timeless style — these are elements that have come to define our brand. This summer was a celebration of all that we cherish, and as we turn our focus to holiday, we will continue inspiring people around the world to come together and step into their dreams.”