Ralph Lauren Corp. is still figuring things out.
The New York-based firm posted consolidated net revenue of $1.35 billion for its first fiscal quarter, a 13 percent decline from the same period last year, and yielded net income of $59.5 million, compared to a net loss of $22.3 million a year ago.
Adjusted earnings per share tallied $1.11 for the quarter, topping the 94 cents analysts projected, and helped send the stock up 8.8 percent to $85.06 in premarket trading.
Revenue in North American and Europe were particularly affected by changes in Ralph Lauren’s wholesale timing and presence and the brand’s pull back on markdowns, with declines of 17 percent and 14 percent, respectively.
Comparable store sales were also down in North America by 8 percent, while e-commerce sales dropped by 22 percent. Comp sales also fell 8 percent in Europe, along with a 5 percent decline in e-commerce sales in the quarter.
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The company intends to continue shrinking its wholesale presence and said it’s set to exit between 20 percent and 25 percent of “underperforming” U.S. department stores by the end of the fiscal year.
“While we are addressing challenges in our business, we have significant opportunity ahead and we’re moving forward with urgency,” said Patrice Louvet, Ralph Lauren’s new president and chief executive officer. “Ralph and I are focused on actively evolving the brand expression and consumer experience so we can ultimately renew growth and get back to leading. We are continuing to build a strong foundation for future growth, as evidenced by our progress this quarter on the key elements of the Way Forward plan.”
Executive chairman and chief creative officer Ralph Lauren echoed that sentiment, adding that he and Louvet “are both committed to preserving the essence of our brand while actively evolving it to renew long-term growth.”
Looking ahead to the second fiscal quarter and the rest of the fiscal year, the company expects revenues to continue to decline by around 9 percent on total capital spending of around $300 million.