Ralph Lauren Corp. is continuing on its growth track — beating top- and bottom-line forecasts in its second quarter and boosting its outlook for the year.
Net income rose 43 percent to $296.6 million, or $4.87 a diluted share. Adjusted EPS hit $4.64, coming in 38 cents ahead of the $4.26 analysts forecast, according to Yahoo Finance.
Revenues for the quarter ended Sept. 26 rose 9 percent to $2.2 billion, stronger than the 5.8 percent increase Wall Street had penciled in.
In constant currencies, the second-quarter top line rose 10 percent and was made up gains in each region, including:
North America, where sales gained 6 percent to $885 million.
Asia, which rose 28 percent to $571 million.
And Europe, where retail traffic was weak this summer, inched up 3 percent to $696 million.
The company has grown more cautious in the near term on the European market even as the growth outlook overall continues to rise.
Investors too are being more cautious as well and traded shares of Ralph Lauren down 8.3 percent to $378 in premarket trading.
Some give-and-take with Wall Street is natural and the company closed Wednesday with a market capitalization of $24.6 billion — one of the best in the industry.
In an interview with WWD, Patrice Louvet, president and chief executive officer, had his eyes focused on a future where he sees as plenty of market share growth.
“Our reset is fundamentally complete,” said Louvet, who became CEO of the company nine years ago.
“Wholesale pullback, off-price pullback, promotional activity pullback, elevation of the brand, elevation of the customer base,” he said, ticking off the brand’s accomplishments.
“We’ve got good momentum in North America. I’m very optimistic about our future in this market. So overall, the brand is strong and getting stronger around the world. We remain on offense…We operate in a market that’s a little more than $400 billion globally and growing, we believe, low single digits. We are close to being a $9 billion company, so that’s about a 2 percent market share. So we see significant runway ahead on men’s, on women’s, on children, on hospitality, on home, many, many different fronts.”
The company’s namesake is also feeling optimistic.
Ralph Lauren, executive chairman and chief creative officer, said: “As we enter the holiday season, I’m reminded of what has always inspired me — the beauty of the world around us, the warmth of family and the optimism and sense of possibility that have guided us for nearly 60 years. These values are deeply personal to me and remain at the heart of our company and everything we create.”
This year, the company is now looking for constant currency revenues to rise by 6 percent to 7 percent, ahead of the 5 percent to 6 percent range previously given.
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