PVH experiences dramatic change in business trends during Q3

05 Feb '09

5 min read

Polo Ralph Lauren Corporation reported net income of $105 million, or $1.05 per diluted share, for the third quarter of Fiscal 2009, compared to net income of $113 million, or $1.08 per diluted share, for the third quarter of Fiscal 2008.

Net income for the first nine months of Fiscal 2009 increased 14% to $362 million from $316 million in the comparable period last fiscal year. Net income per diluted share increased 19% to $3.56 from $2.99 in the first nine months last fiscal year.

“We are operating in one of the most challenging times our Company and industry has ever faced,” said Ralph Lauren, Chairman and Chief Executive Officer. “I am proud of our team's ability to manage our business in a manner that protects our brand and keeps us on the path to achieve our long-term goals. It is times like these that really distinguish strong companies and strong brands,” Mr. Lauren added.

“After a strong first half, we experienced a dramatic change in business trends during the third quarter,” said Roger Farah, President and Chief Operating Officer. “We expect weak consumer spending to be a meaningful headwind for the foreseeable future. As challenging as current circumstances are, I believe that we are operating from a position of strength; we have a long-term plan and a clear strategic road map to help us realize that plan.”

Net revenues for the third quarter of Fiscal 2009 declined 1% to $1.25 billion from $1.27 billion in the comparable period last year. The lower net revenues primarily reflect a reduction in same-store sales at the Company's retail segment that was partially offset by higher wholesale revenues as a result of assuming direct control of childrenswear and golf apparel in Japan.

Net revenues for the first nine months of Fiscal 2009 grew 4% to $3.79 billion from $3.64 billion in the comparable period of Fiscal 2008. The growth in net revenues is primarily attributable to shipments of new products, higher international wholesale revenues and global retail sales growth.

Wholesale sales increased 5% to $655 million from $627 million in the third quarter last year. Higher international wholesale revenues, primarily related to childrenswear and golf apparel in Japan, and shipments of new products offset lower domestic shipments of the Company's core men's, women's and childrenswear products.

For the first nine months of Fiscal 2009, wholesale sales increased 5% to $2.08 billion from $1.97 billion in the comparable period of Fiscal 2008. The year-over-year increase in wholesale revenue is attributable to new product shipments and higher international sales that more than offset a decline in domestic shipments of the Company's core men's, women's and childrenswear products.

Retail sales declined 7% to $547 million from $589 million in the third quarter last year, reflecting a reduction in comparable store sales that was partially offset by revenues from new stores and growth at RalphLauren.com. Comparable store sales declined 13.5%, reflecting a 21.7% reduction at Ralph Lauren stores, a 9.1% reduction at factory stores and a 17.2% reduction at Club Monaco stores. RalphLauren.com sales increased 15% in the third quarter of Fiscal 2009.

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