FILE PHOTO: A man walks past Ralph Lauren Corp.'s flagship Polo store on Fifth Avenue in New York
FILE PHOTO: A man walks past Ralph Lauren Corp.'s flagship Polo store on Fifth Avenue in New York

Ralph Lauren earnings beat estimates

By Nivedita Balu Time of article published Jul 30, 2019

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INTERNATIONAL – Ralph Lauren reported better-than-expected quarterly revenue and profit on Tuesday, as its North America business benefited from a social media marketing blitz and the launch of new editions of its trademark Polo shirts.

Shares of the New York-based company rose nearly 6 percent before the bell, adding to their 8 percent gains so far this year.

Ralph Lauren, like other apparel and handbag retailers, is trying to revive growth after years of heavy discounting and a strategy of flooding the market with its lower-end goods.

The company has launched limited edition apparel and partnered with professional golfer Justin Thomas for the sporting season to reinvigorate sales of core products like its Polo shirts.

Ralph Lauren has also been focusing heavily on marketing, spending as much as 19 percent in the first quarter to promote its products and launch new campaigns through prominent social-media personalities.

Those efforts helped the company’s sales in North America rise 3.1 percent to $719.4. In Europe and Asia, where Ralph Lauren is seen as a more premium brand, sales rose 1.5 percent and 4.3 percent respectively.

“One of the recent success stories at Ralph Lauren is the elevation in marketing, which has been designed to reaffirm the status of the brand,” said Neil Saunders, managing director of GlobalData Retail.

Net income rose to $117.1 million, or $1.47 per share, in the first quarter ended June 29 from $109 million, or $1.31 per share, a year earlier.

Excluding one-time items, the company earned $1.77 per share, while net revenue rose to $1.43 billion.

Analysts were expecting a profit of $1.66 per share and revenue of $1.42 billion, according to IBES data from Refinitiv.

For the second quarter, the company projects net revenue to rise by about 1% on a constant currency basis, and expects a stronger dollar to pressure revenue growth by about 90 to 100 basis points.


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