Fashion brand Ralph Lauren Q3 FY '15 net dips 9.28%

11 Feb '15

3 min read

Net income at fashion brand and NYSE listed, Ralph Lauren Corporation dipped 9.28 per cent from a year ago quarter for the third fiscal quarter ended December 27, 2014.

Ralph Lauren reported net income of $215 million or $2.41 per diluted share in third quarter of fiscal 2015, compared to net income of $237 million or $2.57 per diluted share in third quarter of fiscal 2014.

Net revenues for the reporting quarter however rose slower at 1 per cent from a year ago period to $2.0 billion. Excluding net negative impact from foreign currency, revenues grew 3 per cent.

Gross profit for the third quarter of fiscal 2015, declined marginally by 1 per cent year on year to $1.2 billion and gross profit margin of 57.0 per cent was 120 basis points lower than prior year quarter.

Ralph Lauren attributed the fall in margin to mix impacts like a more promotional US marketplace and unfavourable foreign currency effects.

Operating expenses at $844 million in the quarter under review were 1 per cent above the prior year period, while operating expense rate of 41.5 per cent was 10 basis points lower than third quarter of fiscal 2014.

According to the fashion marketer, incremental investments in global retail development and marketing were more than offset by disciplined operational management and lower restructuring.

Third quarter of fiscal 2015 operating income dipped 6 per cent from a year ago quarter to $315 million, while operating margin of 15.5 per cent was 110 basis points below the prior year due to lower gross profit margin.

Ralph Lauren ended the third quarter of fiscal 2015 with $1.4 billion in cash and investments, flat from the same quarter of previous fiscal.

Inventory in the reporting quarter rose higher at $1.2 billion from $1.1 billion in the comparable prior year period.

The Company had $124 million in capital expenditures in the third quarter of fiscal 2015 as against $81 million in the same quarter of last fiscal year.

It repurchased approximately 0.5 million shares of Class A Common Stock during the third quarter, utilising $100 million of its share repurchase authorisation and bringing year-to-date repurchases to $350 million.

For the fourth quarter of fiscal 2015, Ralph Lauren expects consolidated net revenues to increase at a mid-single digit rate in constant currency.

“Based on current rates, the net negative impact from foreign currency translation is estimated at approximately 550 basis points,” Ralph Lauren informed.

Operating margin for the fourth quarter of fiscal 2015 is expected to be 250-300 basis points below the comparable prior year period, while tax rate is estimated at 31-32 per cent.

Its board of directors declared an 11 per cent increase in the regular quarterly cash dividend on its common stock and the new quarterly cashdividend is $0.50 per share.

Fibre2fashion News Desk - India

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