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Ralph Lauren Q1 earnings increase, sales up 3 percent

By Prachi Singh

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Business

Ralph Lauren Corporation reported earnings per diluted share of 1.47 dollars on a reported basis and 1.77 dollars on an adjusted basis for the first quarter of fiscal 2020 compared to 1.31 dollars on a reported basis and 1.54 dollars on an adjusted basis, for the first quarter of fiscal 2019. The company said, revenue increased by 3 percent to 1.4 billion dollars on a reported basis and 5 percent in constant currency, driven by positive results across regions, while foreign currency negatively impacted revenue growth by approximately 220 basis points in the first quarter.

“We delivered first quarter results in line with our overall expectations, with better than expected operating margin and double-digit EPS growth,” said Patrice Louvet, Ralph Lauren’s President and CEO in a statement, adding, “Our performance was driven by strong continued momentum in our international markets and expense discipline across the organization, while we continued to invest in elevating our brands and stabilize our North America business against a more volatile backdrop.”

Highlights of Ralph Lauren’s Q1 results across geographies

The company added that North America revenue increased 3 percent to 719 million dollars, while wholesale revenue increased 2 percent. In retail, comparable store sales in North America were up 1 percent, driven by a 1 percent comp in brick and mortar stores and flat comps at Ralphlauren.com.

Europe revenue increased 2 percent to 361 million dollars on a reported basis and 7 percent in constant currency, while Europe wholesale revenue was flat on a reported basis and grew 5 percent in constant currency. In retail, comparable store sales in Europe were up 4 percent, driven by a 2 percent increase in brick and mortar stores and a 22 percent increase in digital commerce.

Asia revenue increased 4 percent to 259 million dollars on a reported basis and 8 percent in constant currency, driven by growth in retail. Comparable store sales in Asia increased 5 percent, reflecting growth in both brick and mortar and digital commerce operations.

On a reported basis, net income was 117 million dollars and on an adjusted basis, net income was 142 million dollars compared to 109 million dollars on a reported basis, and 128 million dollars on an adjusted basis, for the first quarter of fiscal 2019.

Ralph Lauren expects 2 to 3 percent revenue growth for FY20

For fiscal 2020, the company continues to expect net revenues to increase 2 percent to 3 percent with foreign currency expected to negatively impact revenue growth by 90 to 100 basis points. The company continues to expect operating margin to increase 40 to 60 basis points in constant currency and foreign currency is expected to negatively impact operating margin by about 10 to 20 basis points.

In the second quarter of fiscal 2020, the company expects net revenue to be up about 1 percent in constant currency with foreign currency expected to pressure revenue growth by approximately 90 to 100 basis points. Operating margin is expected to be up 40 to 60 basis points in constant currency and foreign currency is expected to negatively impact operating margin by about 20 basis points in the second quarter.

Picture:Facebook/Ralph Lauren

Ralph Lauren