Covid-19 impacts Ralph Lauren's Q2 results, sales decline 30 percent

Ralph Lauren has reported net loss in the second quarter of fiscal 2021 of 39 million dollars or loss of 53 cents per diluted share on a reported basis. On an adjusted basis, the company said in a statement, net income was 107 million dollars or 1.44 dollars per diluted share compared to net income of 182 million dollars or 2.34 dollars per diluted share on a reported basis, and net income of 198 million dollars or 2.55 dollars per diluted share on an adjusted basis, for the second quarter of fiscal 2020. The company’s revenue decreased by 30 percent to 1.2 billion dollars on a reported basis and was down 31 percent in constant currency, with declines across all regions due to Covid-19 related impacts.

“Looking across the first half of the fiscal year, we continued our elevation journey while fast-tracking Connected Retail and our company-wide digital transformation,” said Patrice Louvet, the company’s President and Chief Executive Officer, adding, “We also began the hard but necessary work of simplifying our organizational and cost structures to position the company for future growth.”

Ralph Lauren reports revenue decline in core markets

Ralph Lauren’s revenues in North America decreased 38 percent to 543 million dollars. In retail, comparable store sales in North America were down 32 percent, with a 40 percent decrease in brick and mortar stores partly offset by a 10 percent increase in digital commerce, while North America wholesale revenue decreased 46 percent.

The company added that Europe revenue in the second quarter decreased 25 percent to 359 million dollars on a reported basis and decreased 28 percent in constant currency. In retail, comparable store sales in Europe were down 29 percent, with a 35 percent decrease in brick and mortar stores partly offset by a 26 percent increase in digital commerce and Europe wholesale revenue decreased 23 percent on a reported basis and decreased 27 percent in constant currency.

Ralph Lauren’s Asia revenue decreased 7 percent to 237 million dollars on a reported basis and decreased 8 percent in constant currency basis. Comparable store sales in Asia decreased 11 percent, with a 12 percent decline in brick and mortar stores partly offset by a 32 percent increase in digital commerce.

The company’s gross profit for the second quarter was 799 million dollars and gross margin was 67 percent, while adjusted gross margin was 66.5 percent, 500 basis points above the prior year on a reported basis and up 480 basis points in constant currency.

As part of Ralph Lauren’s ongoing brand portfolio review, today the company also announced transition of the Chaps brand to a fully licensed business model, consistent with the long-term brand elevation strategy. The Company has entered into a multi-year licensing partnership with an affiliate of 5 Star Apparel LLC, a division of the OVED Group, to manufacture, market and distribute Chaps menswear and womenswear.

Picture:Facebook/Ralph Lauren