Operating Income- Operating income for the third quarter of Fiscal 2013 was $304 million, 13% greater than the prior year. Operating margin was 16.5% of sales, 150 basis points stronger than the third quarter of Fiscal 2012. The improvement in operating margin primarily reflects the higher gross profit margin discussed above.
Wholesale Operating Income- Wholesale operating income increased 29% in the third quarter of Fiscal 2013 to $145 million from $113 million last year. Wholesale operating margin was 19.7% in the third quarter, 470 basis points stronger than the prior year. The improvement in wholesale operating margin was primarily due to higher gross margins as a result of lower input costs, favorable product mix and operational discipline.
Retail Operating Income-Retail operating income was $201 million, 4% greater than the $193 million achieved in the third quarter of Fiscal 2012, and retail operating margin was 18.9%, 30 basis points below the prior year period. The decline in retail operating margin was principally a result of impairment and restructuring charges associated with the discontinuation of Rugby. Excluding the Rugby-related charges, retail operating margin was 19.8%, 60 basis points greater than the prior year period, as a result of improved profitability in the Americas and Europe that was partially offset by a less favorable geographic mix due to lower Asian sales and continued investment in global retail expansion, including e-commerce.
Licensing Operating Income-Licensing operating income increased 3% to $37 million from $36 million in the third quarter of Fiscal 2012, primarily due to higher licensing revenues and lower net costs.
Net Income and Diluted EPS- Net income for the third quarter of Fiscal 2013 was $216 million, 28% greater than the $169 million achieved in the comparable period of Fiscal 2012, and net income per diluted share rose 30% to $2.31 from $1.78 for the same time period. The increases in net income and net income per diluted share were the result of the growth in operating income discussed above in addition to a lower effective tax rate of 27% compared to 36% in the prior year period.
The lower effective tax rate is primarily related to the favorable resolution of an approximate $15 million discrete tax item and to a greater proportion of earnings generated in lower-taxed jurisdictions. Excluding Rugby-related impairment and restructuring charges, net income for the third quarter of Fiscal 2013 rose 33% to $224 million and net income per diluted share increased 35% to $2.40.
Ralph Lauren