Ralph Lauren Reports Better-Than-Expected First Quarter Fiscal 2015 Profits First Quarter Net Revenues Increased 3% to $1.7 Billion, Led by Strong Retail Segment Growth Operating Margin of 14.3% Reflects Investments in Growth Initiatives and Disciplined Operational Management Earnings Per Diluted Share Was $1.80 in the First Quarter
The Company Repurchased 1.2 Million Shares of Class A Common Stock During the First Quarter NEW YORK--(BUSINESS WIRE)--Aug. 6, 2014-- Ralph Lauren Corporation (NYSE:RL) today reported net income of $162 million, or $1.80 per diluted share, for the first quarter of Fiscal 2015, compared to net income of $181 million, or $1.94 per diluted share, for the first quarter of Fiscal 2014. “Our first quarter results demonstrate that we are making the right strategic decisions and investments to support our long-term growth objectives,” said Ralph Lauren, Chairman and Chief Executive Officer. “Later this month, we’ll mark an important milestone for the Polo brand with the introduction of Polo for women. That launch will be supported by the opening of our first Polo flagship store in New York City. This Fall, we’ll open a 20,000-square-foot Ralph Lauren luxury flagship store in Greater China, a critical brand expression in an important market for us. As exciting as these first steps are now, the long-term potential is even more compelling.” “Our better-than-expected first quarter profitability reflects excellent progress on our strategic initiatives, including double-digit revenue growth for our international and global e-commerce operations,” said Jacki Nemerov, President and Chief Operating Officer. “I am proud of the team’s ability to navigate challenging market conditions while building robust platforms for sustainable growth over the long term. We’re supporting the growing global appeal of our brands and products with prudent investments in world-class shopping environments; advertising and marketing; and our infrastructure. Our priorities are clear, and we have the talent and financial strength to execute them.” First Quarter Fiscal 2015 Income Statement Review
Net Revenues. Net revenues for the first quarter of Fiscal 2015 increased 3% to $1.7 billion, led by strong retail segment sales growth and double-digit expansion in international markets. Wholesale Sales. Wholesale segment sales were $708 million in the first quarter of Fiscal 2015, 4% below the prior year period. The decline in wholesale sales was due to higher revenues associated with the initial transition of Chaps men’s sportswear to a wholly-owned operation in the prior year period and a shift in the timing of shipments between quarters. Retail Sales. Retail sales rose 9% to $960 million in the first quarter, reflecting the incremental contribution from new stores and double-digit growth in international markets and e-commerce. Consolidated comparable store sales increased 3% on a reported basis and were up 1% in constant currency during the first quarter. Licensing. Licensing revenues of $40 million in the first quarter were 4% above the prior year period, reflecting higher royalties from higher sales of Ralph Lauren products worldwide. Gross Profit. Gross profit for the first quarter of Fiscal 2015 increased 4% to $1.0 billion. Gross profit margin of 61.0% was 30 basis points above the prior year period, due to favorable channel and geographic mix that was partially offset by negative foreign currency effects. Operating Expenses. Operating expenses of $799 million in the first quarter were 10% greater than the prior year period. The higher operating expenses primarily reflect business expansion; continued investment in the Company’s strategic growth initiatives and infrastructure; and costs associated with newly transitioned operations. The increase in operating expenses was partially offset by disciplined operational management. Operating Income. Operating income for the first quarter of Fiscal 2015 was $244 million,...
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