- Second Quarter Net Revenues Increased 3% to $1.9 Billion
-Resilient Operating Margin of 15.4% Includes Significant Investments in Growth Initiatives and Infrastructure During the Second Quarter
- The Company Raises Its Full Year Revenue Outlook
“Our results for the first half of Fiscal 2014 position us well for the year,” said Ralph Lauren, Chairman and Chief Executive Officer. “We have extraordinary leadership and a passionate team that is executing with excellence.
"I am excited about the growing momentum in our business worldwide and confident in the relevance of our strategies to deliver meaningful shareholder value creation over the long term. The Board’s decision to raise the quarterly dividend demonstrates its conviction in the Company’s growth initiatives and a commitment to returning cash to shareholders.”
“We made excellent progress on several key initiatives during the second quarter,” said Jacki Nemerov, President and Chief Operating Officer. “We successfully transitioned key operations to new technology platforms and made great strides with our global store expansion and e-commerce efforts.
"Our first half revenues have actualized at the high end of our expectations and profit margins are in line with our plans. As a result of encouraging current trends, we are raising our revenue outlook and intensifying our investment in our global retail operations for the balance of the year. We are confident that the investments we’re making will support accelerated sales and profit growth in the second half of Fiscal 2014.”
Second Quarter Fiscal 2014 Income Statement Review
Net Revenues. Net revenues for the second quarter of Fiscal 2014 rose 3% to $1.9 billion. Excluding the net negative impact from foreign currency translation and discontinued businesses, net revenues increased approximately 4% in the second quarter.
Wholesale Sales. Wholesale segment sales grew 1% to $928 million in the second quarter of Fiscal 2014. Wholesale revenue growth was primarily a result of the contribution from the newly transitioned Chaps men’s sportswear operations and continued growth for certain core North American merchandise categories. A planned reduction in shipments to certain European customers and lower Japanese wholesale sales partially mitigated wholesale revenue growth during the quarter.
Retail Sales. Retail sales rose 5% to $944 million from $901 million in the second quarter last year, reflecting the incremental contribution from new stores, including newly transitioned Australia/New Zealand operations; growth for e-commerce operations worldwide; and comparable store sales growth in constant currency that was partially offset by the net negative impact of foreign currency translation.
Excluding the impacts of discontinued businesses and foreign currency effects, retail sales increased 8% from the prior year period. Consolidated comparable store sales declined 1% on a reported basis and were up 1% in constant currency during the second quarter.
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