Polo Ralph Q1 revenues up by 4% to $1.11 bn

06 Aug '08

5 min read

Polo Ralph Lauren Corporation reported net income of $95 million, or $0.93 per diluted share, for the first quarter of Fiscal 2009, compared to net income of $88 million, or $0.82 per diluted share, for the first quarter of Fiscal 2008. The first quarter results reflect 4% net revenue growth, an 8% increase in net income and diluted earnings per share that was 13% higher than the prior year period.

The growth in net income principally relates to a higher gross profit margin that was offset by increased operating expenses associated with new business initiatives, as well as a lower effective tax rate of 35% in the first quarter of Fiscal 2009 compared to a 39% tax rate in the comparable period last year.

"The global appeal of our iconic products continues to expand, and emerging merchandise categories are also gaining momentum," said Ralph Lauren, Chairman and Chief Executive Officer. "Our lifestyle positioning is resonating with consumers worldwide, supported by our continued investment in advertising, marketing and public relations, including high profile events such as Wimbledon and the Olympics. Our status as one of the world's few truly global luxury lifestyle brands is an incredible asset for our Company," Mr. Lauren added.

"Our first quarter results not only attest to the global desirability of our brands and products, but also to the fact that we are innovating, executing and merchandising at a higher and better level than ever before," said Roger Farah, President and Chief Operating Officer. "While we continue to have a conservative view of the domestic retail environment, we are in excellent financial condition and will continue to invest in growing our business worldwide."

First Quarter Fiscal 2009 Income Statement Review:
Net Revenues. Net revenues for the first quarter increased 4% to $1.11 billion, compared to $1.07 billion for the comparable period last year. The growth in net revenues primarily reflects strong European wholesale sales, growth in global retail sales and favorable foreign currency effects.

• Wholesale Sales. Wholesale sales of $575 million were flat with the prior year period. Revenues from our newly-launched American Living brand and sustained strength in Europe offset lower domestic shipments of our core men's, women's and childrenswear products.

• Retail Sales. Retail sales were up 9% to $492 million, compared to $450 million in the first quarter of Fiscal 2008. Comparable store sales increased 3.9%, reflecting an increase of 5.3% at Ralph Lauren stores, 3.3% at factory stores and 2.9% at Club Monaco stores. RalphLauren.com sales increased 20%, driven by double-digit gains in all major product categories.

• Licensing. First quarter licensing royalties increased 1% to $47 million compared to $46 million for the comparable period in Fiscal 2008. Growth in domestic Polo men's underwear and Chaps royalties, in addition to revenue from new American Living product licenses, offset a decline in home licensing royalties.

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