Net income for Q3FY16 slips at Ralph Lauren

08 Feb '16
3 min read

Net income for the third quarter of fiscal 2016 at Ralph Lauren Corporation slipped to $193 million, or $2.27 per diluted share, excluding restructuring and other charges.

This compares to reported net income of $215 million, or $2.41 per diluted share, for the third quarter of fiscal 2015.

However, according to a Ralph Lauren press release, on a reported basis, net income was $131 million or $1.54 per diluted share in the third quarter of fiscal 2016.

Net revenues for the reporting quarter declined 1 per cent year over year on a constant currency basis and 4 per cent on a reported basis to $1.9 billion.

While international net revenue grew 6 per cent in constant currency in the third quarter, North America revenue dropped 4 per cent.

“The decline in reported net revenues included approximately 300 basis points of negative impact from foreign currency effects,” the apparel retailer explained.

In the third quarter of fiscal 2016, wholesale segment sales dipped 3 per cent on a constant currency basis as a decline in sales in North America offset increased sales in Europe.

“Retail sales were in line with the prior fiscal on a constant currency basis in the third quarter as growth in new stores and e-commerce was offset by negative comparable store sales,” the retailer added.

In the quarter under review, reported retail segment sales went down 3 per cent from a fiscal ago period to $1.1 billion, while consolidated comparable store sales fell 5 per cent on a constant currency.

“Licensing revenues of $47 million in the third quarter of fiscal 2016 were in line with the prior year period in both constant currency and on a reported basis,” Ralph Lauren stated.

Gross profit for the third quarter of fiscal 2016 was $1.1 billion, excluding restructuring and other charges of $10 million and gross profit margin was 56.8 per cent, down 20 basis points from prior fiscal's same quarter.

Operating expenses in the reporting period reached $838 million, excluding restructuring and other charges, 1 per cent below the previous fiscal's third quarter, due to better expense management.

As per the company, operating expense rate of 43.1 per cent increased 160 basis points compared with the third quarter of fiscal 2015, due to fixed expense deleverage and investments in infrastructure.

The company had an effective tax rate of approximately 25.1 per cent, excluding restructuring and other charges as against 28.6% in the third quarter of fiscal 2015.

Executive chairman Ralph Lauren said, “While our recent results have been disappointing, I am greatly encouraged by the changes that are already taking place since the appointment of Stefan Larsson as our new CEO.”

“We have built one of the strongest global brands in the industry and our goal is to further strengthen the brand, drive strong financial performance and deliver shareholder value,” he too added. (AR)

Fibre2Fashion News Desk – India

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