Ralph Lauren Profit Tops Estimates; But Sales And Guidance Trail Views

Ralph Lauren Corp (NYSE:RL) said Thursday its fiscal fourth quarter profit rose 35 percent while its revenue missed Street expectations and the retailer offered a weak guidance for the year and current quarter.

Ralph Lauren Profit Tops Estimates; But Sales And Guidance Trail Views

The apparel maker announced that its fiscal fourth quarter profit rose to $127.2 million, or $1.37 a share, from $94.4 million, or 99 cents, a year earlier. However it could barely enhance its revenue in the quarter ended March 30 as its revenue could rise only 1 percent to $1.6 billion. Ralph Lauren earlier predicted mid-single-digit percentage revenue growth.

Ralph Laruen’s latest period profit included about $6 million in pre-tax impairment and restructuring charges linked with the company’s winding down of its Rugby operations.Excluding charges, the company said it would have earned $1.41 a share.

In its guidance for the year, the company forecast revenue growth of 4 percent to 7 percent, below the 9 percent recently expected by analysts polled by Thomson Reuters.

Similarly for the current quarter, it forecasts a revenue growth in a low-single-digit percentage.  However analysts recently expected a 9 percent growth.

Ralph Lauren Stock

Ralph Lauren Corp (NYSE:RL) stock has risen 33 percent in the past 12 months, while its competitor Michael Kors Holdings Ltd (NYSE:KORS) posted a 66 percent rise during the same period. Lauren’s shares also trailed PVH Corp (NYSE:PVH) which saw its stock returning over 60 percent increase.

Ralph Lauren brands include upscale brands such as Polo and Club Monaco. Post-recession, the company has seen enhanced sales for several quarters with consumers in the luxury sector proved to be more resilient.

For the quarter ended March 30, the apparel maker improved its retail sales by 7 percent, while its wholesale sales declined by 3.9 percent. Its licensing revenues were flat compared with the fourth quarter of 2012.

The New York-based company’s gross margin rose 2.2 percent to 59.3 percent.

Ralph Lauren’s President and COO indicated that the company was able to post enhanced profit despite facing sustained macroeconomic challenges.

The apparel maker’s share declined more than 3 percent in pre-market trading, reflecting the management’s weaker guidance. It was trading at $181 this morning.

Ralph Lauren Corp (NYSE:RL) stock trades in the 52-week range of $134.29 to $192.03.

About the Author

Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports