Polo Ralph Lauren Corp. posted fourth-quarter results ahead of Wall Street's expectations, but said full-year 2008 earnings per share would be lower due to costs associated with several acquisitions.
For the three months ended March 31, net income rose 17.1 percent, to $73.2 million, or 68 cents a diluted share, from $62.5 million, or 58 cents, in the year-ago quarter. Analysts' consensus estimate was 62 cents.
Total revenues for the period were up 6.1 percent, to $1.03 billion from $971.6 million. Gains included a 9.6 percent jump in wholesale sales, to $628.9 million, and a 3.4 percent increase in retail sales, to $346.2 million; the balance came from licensing income. At retail, total company same-store sales rose 6.3 percent.
"We have made significant progress on all fronts, from opening new luxury stores to initiating steps to expand our accessories business in new categories such as watches and fine jewelry, to taking direct control of our Japanese business and our Internet business," Ralph Lauren, chairman and chief executive officer, said in a statement.
Lauren added, with pride, that the "brand's reach has grown to more than 80 countries and now represents more than $10 billion in retail sales worldwide."
By operation, comps at Ralph Lauren stores rose 6.7 percent and at factory stores were up 6.3 percent. Club Monaco stores gained 5.3 percent. Sales at Polo.com were down 32 percent, excluding the impact of conforming Polo.com's fiscal-year reporting period in the fourth quarter a year ago, but comps rose 27 percent.
For the year-end period, profits jumped 30.2 percent, to $400.9 million, or $3.73 a diluted share, from $308 million, or $2.87, a year earlier. Total revenues rose 14.7 percent, to $4.3 billion from $3.75 billion.
During the year, the company made a number of acquisitions, including a 50 percent stake in Ralph Lauren Media that it did not previously own. The company also acquired the Polo Ralph Lauren Leathergoods business, and conducted a tender offer for almost all of the outstanding shares of Impact 21, its Japanese sublicense for men's and women's apparel, accessories and jeans. It acquired the remaining 50 percent stake of New Polo Japan, the company's master licensee in Japan.Due to the acquisitions, which cost $360 million, the company lowered diluted earnings per share for fiscal 2008 to the range of $3.70 to $3.80 from a previous guidance of $3.95 to $4.05 a share.
After dipping in early morning trading, shares of Polo recovered to close at up 3.4 percent, to $96.41, Wednesday on the New York Stock Exchange. Over 2.5 million shares traded versus an average three-month volume of 767,962 shares.
In a telephone interview, Roger Farah, president and chief operating officer, said the company's handbag license would expire at the end of the calendar year, and that the company was planning to bring the operation in-house.
"At Club Monaco, we've made so much progress. We have completed a wonderful year and are off to a great start. The merchandise assortments and store presentations are right on the money and [we are] looking at U.S. and international retail expansion....Rugby is still in the discovery phase in terms of customer profile and demographics, male/female and casual versus dressy. Surprisingly, age has been more elastic than we anticipated. It was interesting to find that [Rugby] appeals to the younger customer and that it reaches higher up [among some older consumers]. It appeals to those older, in their 30s, who are young at heart and contemporary in their thinking," said Farah.
At the core Ralph Lauren business, the focus is on expanding in Europe and Asia. "I think it is interesting that for the Ralph Lauren family of brands, it is the aspirational [vibe] that runs through the younger businesses and the more mature businesses. They all want a piece of that lifestyle. When we opened in Russia, we weren't sure how the Russian consumer would respond to an American luxury brand. We heard they were attracted to more flashy clothes and we found they responded to [our] sophisticated offerings because they wanted to be a part of our dream," he said.
Up next for the company is the launch of American Living at J.C. Penney stores in February. The merchandise has been expanded to include more than 50 categories of men's and women's apparel, accessories, children's and home products.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)