NEW YORK — As Polo Ralph Lauren Corp. hurdled a slew of charges weighing down its bottom line to beat Wall Street's consensus estimate by a penny, the company inked an exclusive deal with Kohl's to deliver Chaps-branded apparel for women's and boys' wear.
The retailer currently carries Chaps-branded men's wear from Warnaco Group Inc., which licenses the brand from Polo Ralph Lauren. The line for Kohl's is a one-year exclusive contract, and the products are expected to ship next January and February. The products are rolling out in all of Kohl's stores. As of last month, the retailer operated more than 650 units.
Regarding the quarter, Roger Farah, president and chief operating officer, said during a telephone interview, "We've had a terrific spring, clearly fueled by the right fashion product in women's across all categories."
For the three months ended April 2, net income fell by 69.4 percent to $23.4 million, or 22 cents a diluted share, from $76.4 million, or 75 cents, in the year-ago quarter. Charges impacting profits relate to the company's litigation with Jones Apparel Group; an alleged security breach at its retail stores in connection with its computer system; expense adjustments for the accounting of leases, and a restructuring charge pertaining to consolidation of European operations. Excluding these items, net income rose 5.8 percent to $85.1 million, or 81 cents a diluted share, from $80.4 million, or 79 cents, in the prior year. Analysts' consensus had the company pegged to earn 80 cents.
Total revenues gained 10.2 percent to $902.2 million from $818.8 million. Revenues included a 3.5 percent rise in licensing income to $67.7 million and a 10.8 percent gain in sales to $834.5 million. The sales component includes contributions from wholesale sales, which rose 10 percent to $543 million, and retail sales, which increased 12.2 percent to $291.5 million.
For the full-year period, net income rose 12.5 percent to $190.4 million, or $1.83 a diluted share, from $169.2 million, or $1.68, last year. Total revenues jumped 24.7 percent to $3.31 billion from $2.65 billion, which included a wholesale sales gain of 41.4 percent to $1.71 billion — in part from the contribution of Lauren and children's — and a 15.2 percent gain in retail sales to $1.35 billion.
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