NEW YORK (AP) — Ralph Lauren says reduced wholesale shipments to Europe and a tax cost drove its fiscal second-quarter net income down by 8 percent and lowered its revenue expectations for the year amid a global slowdown
But the luxury fashion company's second-quarter results topped analysts' expectations, and its shares rose modestly.
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.
Ralph Lauren says net income for the three months ended Sept. 29 fell to $213.7 million, or $2.29 per share. That compares with $233.5 million, or $2.46 per share, last year. Analysts expected $2.15 per share.
Revenue fell 2 percent to $1.86 billion. Analysts expected $1.83 billion. A planned reduction in wholesale shipments to some European stores hurt revenue.
Ralph Lauren says it plans to discontinue its Rugby brand to focus on more profitable brands.
Ralph Lauren said that sales to its department stores and other store customers fell to $915 million, down 8 percent from the year-ago period, hurt by planned reductions in shipments to certain European specialty stores. The company's business has been hurt by the phasing out of its American Living brand, which had been exclusively carried by mid-price department store chain J.C. Penney.
Sales at its own stores rose 5 percent to $901 million. Revenue at stores opened at least a year rose 3 percent and was up 5 percent in constant currency. The increase was fueled by new stores and e-commerce operations that was partially offset by stores closures related to its move to phase out stores operated by local partners in China. It aims to replace those outlets with company-owned shops.
Ralph Lauren also lowered sales expectations for fiscal 2013 to 2 percent to 3 percent growth, from a prior forecast of mid-single digit growth.
"Macroeconomic conditions lead us to be incrementally more cautious on near-term customer demand trends worldwide," said Roger Farah, Ralph Lauren's president and chief operating officer in a statement.
Ralph Lauren's shares rose $2.84 per share, or 1.7 percent, to $161.88 in morning trading Friday.