Ralph Lauren's Profit Shrinks -- WSJ
15 May 2019 - 5:02PM
Dow Jones News
Sales to department stores decline as company pulls back from
discount chains
By Suzanne Kapner and Kimberly Chin
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 15, 2019).
Ralph Lauren Corp.'s profit and sales fell in the most recent
quarter, dragged down by declines in North America and a higher tax
expense.
The company's stock fell 3.7% to $113.95 even though Ralph
Lauren increased its quarterly dividend by 10%.
"We believe our strategy is working and our plan is on track,"
Ralph Lauren Chief Executive Patrice Louvet told analysts on a
conference call.
He noted that for the full fiscal year the company surpassed
many targets in its strategic plan, including revenue and profit
growth.
Mr. Louvet pointed to progress in winning over younger consumers
and focusing on more full-priced sales as signs the company was on
track. But he added it needed to do a better job attracting
shoppers to its retail stores.
Net revenue for the period that ended March 30 fell 1.5% to
$1.51 billion from the year prior, reversing three previous
quarters of growth.
Profit for the period was down 23% to $31.6 million, or 39 cents
a share, compared with $41.3 million, or 50 cents a share, a year
earlier.
In North America, revenue fell 7% to $708 million. Wholesale
revenue to third parties such as department stores fell 10%, in
part due to a planned reduction to off-price sellers such as T.J.
Maxx.
Sales excluding newly opened or closed locations at the
company's North American retail stores fell 4%, including a 7%
decline at bricks-and-mortar locations. Digital sales grew 6%. Asia
and Europe performed better, with revenue up 6% and 4%,
respectively, in the period.
The company has invigorated core products such as its Polo
shirt, which it said performed strongly in the period.
But other areas still need work, such as its moderately priced
Lauren line sold in department stores.
Mr. Louvet said the brand needs to focus more on core categories
such as denim and dresses and have a better balance of fashion and
basics. In recent seasons, the line had too much fashion, he said.
There is a new design team in place for the line, and the company
is also renovating its Lauren shops in department stores.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Kimberly
Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
May 15, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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