Ralph Lauren’s Retail channel
Ralph Lauren (RL) carries out its Retail business through company-operated stores, concession-based shops-within-shops, and e-commerce websites around the world. The Retail channel accounted for 58.4% of the company’s total revenue in fiscal 1Q17.
At the end of fiscal 1Q17, the company operated 132 Ralph Lauren stores, 81 Club Monaco stores, and 272 factory outlets. In addition, the company also operated 598 concession-based shops-within-shops at 236 retail locations.
Retail channel in fiscal 1Q17
Ralph Lauren’s Retail segment sales declined by 3% YoY in fiscal 1Q17 to $907 million, in both reported and constant currency terms. The decline in sales was a result of worsening same-store sales, which decreased by 7% in constant currency terms and by 6% on a reported basis.
Sales comps were affected by lower traffic trends during the quarter as a result of a challenging macro environment.
RL’s e-commerce channel registered declining sales
Ralph Lauren reported a decline of 6% in global e-commerce revenues. This is unlike the general trend that has been noticed among the apparel and fashion companies. PVH Corp. (PVH) reported a 20% YoY increase in its e-commerce business in the last reported quarter. VF Corp. (VFC) also reported a good 30% increase in e-commerce revenue in its last quarter.
Even for Kate Spade (KATE), its e-commerce business was the major contributor toward its top-line growth. The company’s sales comps grew by 4% in the last reported quarter. However, excluding the e-commerce sales, comparable sales grew by just 1%.
ETF investors looking to add exposure to Ralph Lauren can consider the iShares US Consumer Goods ETF (IYK), which invests 0.27% of its portfolio in the company.
Read the next section to learn about the company’s margins and profitability in fiscal 1Q17.