Operating income in the second quarter of fiscal 2018 was $193 million, including restructuring-related and other charges of $30 million. On an adjusted basis, operating income of $224 million decreased 1 per cent and operating margin was 13.4 per cent. The higher operating margin was attributable to gross margin expansion.
On a reported basis, net income in the second quarter of 2018 was $144 million or $1.75 per diluted share. On an adjusted basis, net income was $164 million, or $1.99 per diluted share, excluding restructuring-related and other charges. This compared to a net income of $46 million, or $0.55 per diluted share on a reported basis, and net income of $158 million, or $1.90 per diluted share on an adjusted basis, for the second quarter of 2017.
Gross profit for the second quarter of fiscal 2018 was $996 million on both reported basis and adjusted basis, excluding restructuring-related and other charges. Gross margin was 59.8 per cent on a reported and 59.9 per cent on an adjusted basis. The gross margin increase was driven by initiatives to improve quality of sales through reduced promotional activity, favourable geographic and channel mix shifts, and improved product costs.
In the second quarter of fiscal 2018, the company had an effective tax rate of approximately 25 per cent on a reported basis, excluding restructuring-related and other charges, above guidance of 24 per cent, due to discrete one-time items. This compared to a reported and an adjusted effective tax rate of 38-29 per cent, respectively, in the prior year period.
"I am pleased with the progress we are making as we continue to strengthen the foundations of our business and elevate the expression of our iconic brand," said Ralph Lauren, executive chairman and chief creative officer. "Louvet has already proven to be an invaluable partner who is embracing our core values, bringing unique expertise and uniting and empowering our capable teams."
"We are focused on creating value for all of our stakeholders by continuing to drive productivity and re-igniting quality growth," said Patrice Louvet, president and chief executive officer. "While there is a lot of work to be done, I am encouraged by the early progress we are making across multiple fronts to strengthen our brand and better connect with consumers." (RR)
Fibre2Fashion News Desk – India
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