Shares of Polo Ralph Lauren Corp. jumped 11.9 percent Wednesday after the luxury goods firm said fourth-quarter profits rose 41.4 percent, beating Wall Street estimates by 35 cents.
The firm intends to rev up its accessories business in fiscal 2009, but steer clear of initiating retail partnerships, such as the one it has with J.C. Penney for the American Living brand, Roger Farah, president and chief operating officer, told WWD.
Boosted by strong international sales and the American Living launch, the firm said Wednesday that profits for the quarter ended March 29 increased to $103.5 million, or $1 a diluted share, from $73.2 million, or 68 cents, in the year-ago period.
Total revenues gained 20.3 percent to $1.24 billion from $1.03 billion. Revenues included a 21.5 percent increase in wholesale and retail sales to $1.19 billion from $975.1 million, with the balance from licensing income. By operation, wholesale volume increased 24.9 percent to $785.6 million, while retail sales rose 15.5 percent to $400 million. Total comparable-store sales rose 8.9 percent, which reflected a 5.6 percent comp gain at Ralph Lauren stores, a 10 percent increase at factory stores and a 12.5 percent rise at Club Monaco stores.
For the year, income rose 4.7 percent to $419.8 million, or $3.99 a diluted share, from $400.9 million, or $3.73, in the prior year. Total revenues were up 13.6 percent to $4.89 billion from $4.3 billion.
Shares of the company closed at $69.07 in trading Wednesday on the Big Board.
Ralph Lauren, chairman and chief executive officer, commented, "It is the spirit of entrepreneurship that keeps us nimble, allowing us to develop exciting products, retail formats and even entirely new brands on a global platform."
In a phone interview, Farah said, "This is as difficult a market as I have seen," adding he was confident that strong companies will "come out just fine."
One of Polo's long-term goals is to diversify its geographic revenue mix to the point where each of the three regions represent one-third of its income stream. Currently the U.S. represents 65 percent of branded sales and Europe 17 percent, while Asia and other international fronts bring in 18 percent."It'll take some time" to achieve this balance, Farah said, "but I do believe that it will not be that far off. While the U.S. is still growing, the international markets are growing more quickly."
Polo has been able to grow its European sales to nearly $1 billion from $200 million in volume several years ago when the company first began assuming direct control of the region. Following successful flagship openings in Paris and Moscow, the company is planning to open a store in Istanbul with a licensing partner in fall 2008.
For the balance of the fiscal year, the company's in-house product development design and supply chain capability will be focused on handbags, not forming additional retail alliances.
"Having taken all the major categories back in-house, we can now begin to build our accessories with handbags, footwear and small leather goods. With Luxottica [eyewear] and Richemont [Ralph Lauren watches in spring 2009], we have the two best global partners, and we are now able to speak with one voice [in the] accessories [category]," said Farah.
In the past year, the company also saw much activity as it developed more than 40 product categories in a 575-door launch of the American Living brand at J.C. Penney. It's an initiative from the firm's Global Brand Concepts group. The company will add new American Living categories during fiscal 2009, and while the intent is to build more proprietary brands for retail partners, the firm isn't planning on tackling any new projects in the current year, Farah said.
He gave much of the credit for Polo's recent successes to the $1.9 billion it's invested over the last five years in acquisitions, retail expansion, wholesale shop-in-shops and infrastructure upgrades. These investments have aided the company's ability to push ahead with its three main goals: New merchandise and product development, expansion of direct-to-consumer business, and growth of international operations.
Polo said it continues to expect diluted earnings per share for fiscal year 2009 to be between $3.95 and $4.05.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)