Ralph Lauren beats on top and bottom lines
New York–based Ralph Lauren (RL) reported its fiscal fourth-quarter[1. ended March 2018] results this morning, March 23, before the bell. The fashion giant cruised ahead of top- and bottom-line expectations for the quarter.
Its total sales declined 2.2% YoY (year-over-year) to $1.5 billion, beating the Thomson Reuters I/B/E/S estimate by $50 million. Adjusted EPS rose 1.1% YoY to $0.90, which was $0.07 more than the consensus expectation. It was the company’s ninth consecutive earnings and sales beat.
North American brick and mortar comps turn positive
RL’s revenue fell 7% on a constant currency basis, mainly due to the company’s quality of sales initiatives, fewer promotional days, brand exits, and lower consumer demand.
Its North American business continued to shrink in the quarter, with sales falling 14% YoY to $759 million. However, North American brick and mortar comps were strong, rising 6% compared to a 3% decline in the previous quarter.
But an 18% decline in e-commerce comps completely offset its brick and mortar same-store sales growth, resulting in flat comps for the quarter.
Sequentially, however, it was a much stronger quarter for North America. Comps fell 11%, 9%, and 8% in the previous three quarters, respectively.
Asia was once again the best-performing territory for Ralph Lauren. Sales were up 17% YoY on a reported basis and 11% YoY on a constant currency basis, driven by strength in retail as well as wholesale. Asia comps improved 4% during the quarter.
European sales improved 13% YoY on a reported basis but declined 1% on a constant currency basis. Currency-neutral comps fell 6% since the 8% growth in e-commerce comps was entirely offset by an 8% decline in brick and mortar same-store sales.
Ralph Lauren stock rose 3.3% in the pre-market trading session today.