NEW YORK (AP) — Ralph Lauren Corp. said Wednesday that its fiscal first-quarter net income rose 5 percent, but the clothing and home goods maker forecast a revenue decline in the current quarter and sounded a note of caution about the weak global economy hurting consumer spending.
The 45-year-old owner of the Ralph Lauren Collection and Polo by Ralph Lauren brands sells its products at department stores, its own shops and through other retailers.
Net income from April through June was $193.4 million, or $2.03 per share. That compares with net income of $184.1 million, or $1.90 per share, a year ago. Ralph Lauren opened new stores, demand rose in North America and its tax rate was lower.
Analyst expected net income of $1.78 per share, according to FactSet.
Revenue rose 4 percent to $1.59 billion from $1.53 billion. Analysts expected $1.58 billion.
Revenue from sales to other stores rose 3 percent to $694 million, helped by strong growth in North America, particularly for clothing. That was offset by a decline in Europe due to the stronger dollar, some lower shipments and a change in the timing of some seasonal merchandise. Reducing distribution to retailers in China also hurt results.
Revenue in Ralph Lauren stores rose 5 percent to $857 million as the company opened new stores and grew online operations. Revenue in stores open at least one year, a key retail metric, rose 1 percent.
But Ralph Lauren was cautious about future growth for the rest of its fiscal year, which ends in March 2013.
"The outlook for consumer spending and global economic growth remains challenging and we are planning our business accordingly," said CEO Roger Farah.
For the second quarter, it expects revenue to decline by a mid-single digit percentage, hurt by the stronger dollar, which cuts into the value of overseas sales. Also hurting revenue was Ralph Lauren's continued pullback on some of its China business and the winding down its American Living clothing and housewares brand. American Living is a collaboration with J.C. Penney Co.
Analysts had expected revenue to rise almost 4 percent in the July-September quarter.
For the full year, the company still expects revenue to rise by a mid-single digit percentage, in line with analysts' forecast.
Shares fell $1.68, or 1.1 percent, to close at $151.35 Wednesday. The stock has gained nearly 10 percent since the beginning of the year.