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NEW YORK, United States — Ralph Lauren climbed in early trading after posting quarterly results that exceeded analyst estimates in almost every area as increased marketing paid off during the holiday season.
Companywide same-store sales excluding currency swings, a key performance measure, rose 4 percent last quarter, the company said Tuesday. Analysts had projected 2 percent growth.
Key Insights
Ralph Lauren has been on a rebound since growing stodgy and losing ground to fast-fashion sellers in recent years. Executives refocused the brand on classic styles and began targeting younger shoppers through trendy collaborations and headline-grabbing products such as a heatable moon jacket. The company said the improved assortment helped boost direct-to-consumer sales.
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Chief executive Patrice Louvet has tempered discounts and reduced inventory in order to revitalise the brand and improve margins, especially in its home market of North America where the company is most exposed to off-price retailers. North American online sales surged 21 percent in the quarter, helping to buoy results.
Asia was the only area where Ralph Lauren didn’t meet its expectations, with comparable-store sales growth there of 4 percent — which matched growth in other regions — falling short of expectations for the usually stronger Asia market.
The company continues to phase out discounting. As a result, Ralph Lauren expects revenue to fall slightly in the current quarter “due to a planned reduction in off-price sales.”
Market Reaction
Shares of Ralph Lauren climbed as much as 9.1 percent in early trading. Through Monday’s close, the stock had jumped 11 percent since the start of the year, outpacing the 8.7 percent gain in the S&P 500 Index.
By Kim Bhasin; editors: Anne Riley Moffat Jonathan Roeder and Lisa Wolfson.
