Ralph Lauren

Ralph Lauren Corp. is on a roll.

The firm’s second-quarter earnings rose 6.9 percent to $182.1 million, or $2.34 a diluted share, from $170.3 million, or $2.07 a year ago — with EPS benefiting from the company’s repurchase of 2.6 million share during the quarter.

Adjusted EPS of $2.55 came in well ahead of the $2.39 analysts had penciled in.

Revenues for the three months ended Sept. 28 inched up to $1.71 billion from $1.69 billion.

The performance was strong enough to drive shares of Ralph Lauren up 12 percent to $112.95 in pre-market trading on Wall Street. 

The company overcame a difficult retail environment in the U.S., disruptions in Hong Kong and tariffs in the U.S.-China trade war by focusing on the power of its namesake brand and controlling distribution.

“Our global teams are elevating our iconic brand across every market and channel,” Ralph Lauren, executive chairman and chief creative officer, said in a statement. “From our stores to our digital flagships and the way we are connecting on social media, the authentic expression of the Ralph Lauren lifestyle is showing up in relevant ways all over the world.”

Patrice Louvet, president and chief executive officer, added: “We delivered second-quarter results slightly ahead of our overall expectations, including better than expected revenues, operating margin and double-digit EPS growth, amid a more challenging operating environment. Our progress was driven by a continued focus on brand elevation and creating immersive lifestyle experiences that are amplified across our stores and digital marketing and commerce channels around the world, while also maintaining expense discipline.”

In an interview with WWD, Louvet also said the company has successfully raised its average unit retail prices and that inventories were in good shape heading into the holiday season, causing him to be “cautiously optimistic.”

“We’re halfway through our fiscal year,” the ceo said. “We feel like we’re making solid progress on our plan.”

The company has cut its department store distribution by 25 percent and is becoming more digital. The global digital business grew by a percentage in the low-teens with growth of more than 30 percent in internationally while the expansion in the U.S. was described as “modest,” by the company.

Overall, the approach at Ralph Lauren relies on the power of branding  and an agility to follow the market that has let the company weather other disruptions. Among them is the business in Hong Kong, which Louvet said “took a big hit,” with sales falling 27 percent during the quarter, compared with 22 percent growth in mainland China.

load comments
blog comments powered by Disqus