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Reported sales down 5% at Ralph Lauren in Q1FY16
10
Aug '15
For the first quarter ended June 27, 2015, reported net revenue was down 5 per cent from a year ago quarter at apparel marketer Ralph Lauren.

Reported net revenues declined 5 per cent year over year to $1.6 billion in the first quarter of fiscal 2016, which includes approximately 500 basis points of negative impact from foreign currency effects.

However, according to a Ralph Lauren press release, net revenues for the first quarter of fiscal 2016 were in line with the prior fiscal period on a constant currency basis.

Gross profit for the reporting quarter was $969 million and gross profit margin was 59.8 per cent, excluding restructuring-related non-cash charges of $3 million.

“Gross profit margin was 120 basis points lower than the previous fiscal's first quarter, reflecting unfavourable foreign currency effects,” it added.

Excluding restructuring and related non-cash charges, operating expenses amounted to $828 million in the first quarter of fiscal 2016, up 4 per cent year on year.

Operating expense rate at 51.1 per cent increased 430 basis points compared with the first quarter of fiscal 2015, due to the timing of revenue receipts and incremental investments in infrastructure.

Excluding restructuring and related non-cash charges, operating income totaled to $141 million in the quarter under review, while operating margin at 8.8 per cent was 550 basis points below the prior fiscal first quarter.

Ralph Lauren informed that the operating margin was better than the outlook provided in May due to disciplined operational management.

“The lower operating margin was attributable to fixed expense deleverage, incremental investments in infrastructure and negative foreign currency effects,” the apparel marketer explained.

Excluding restructuring and related non-cash charges, net income for the first quarter of fiscal 2016 was $95 million, or $1.09 per diluted share as against $162 million, or $1.80 per diluted share.

On a reported basis, net income touched $64 million or $0.73 per diluted share in the first quarter of the reporting fiscal.

The Company had an effective tax rate of approximately 30 per cent, excluding restructuring and related non-cash charges, in the first quarter of fiscal 2016.

This compares to an effective tax rate of 31 per cent in the first quarter of fiscal 2015. On a reported basis, the effective tax rate was 29 per cent in the first quarter of fiscal 2016.

In the 90 days since the announcement of a new global brand management organisational structure, Ralph Lauren has established six global brand groups and filled the global brand president roles.

“The Company is on track to achieve $100 million in annual expense savings associated with the restructuring, it observed. (AR)

Fibre2Fashion News Desk – India

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