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Ralph Lauren posts revenue growth by 1% in Q3 FY20
06 Feb 20 3 min read
Ralph Lauren Corporation, a global leader in marketing and distribution premium lifestyle products, has reported revenue growth by 1 per cent to $1.8 billion on a reported basis in third quarter (Q3) FY20. Gross profit was $1.1 billion and gross margin was 62.2 per cent. On a reported basis, net income was $334 million in Q3 that ended on December 28, 2019.
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Operating expenses in Q3 were $865 million on a reported basis, including $21 million in restructuring-related and other charges. Operating income for the quarter was $224 million on a reported basis, including restructuring-related and other charges of $21 million, and operating margin was 12.8 per cent.
The company's marketing investment increased by 16 per cent while unit retail across direct-to-consumer network was up 6 per cent in Q3 compared to last year.
The company elevated their brand and connected with consumers through our Polo Sport Outdoors Limited edition launch, "7 Days, 7 Drops" holiday programme on the North America Polo app, and amplification of localised brand moments such as our live-streaming show featuring Ayunga and a WeChat mini-programme for singles' day in China.
Ralph Lauren continued expansion of digital partnerships and capabilities, including the launch of their mobile app in the UK, buy online-ship from store fulfillment in China, and improvements in mobile and personalisation on their website.
The company also reported positive growth in every region led by Europe and Asia, with constant currency growth of 5 per cent in each region, and slight growth in North America. Excluding Hong Kong, Asia revenues were up 9 per cent in constant currency.
North America revenue in Q3 increased slightly to $911 million. In retail, comparable store sales in North America were up 4 per cent, driven by a 4 per cent increase in brick and mortar stores and a 6 per cent increase in online sales. North America wholesale revenue decreased 8 per cent.
Europe revenue in Q3 increased 3 per cent to $438 million on a reported basis. In retail, comparable store sales in Europe were up 3 per cent, driven by a 2 per cent increase in brick and mortar stores and a 15 per cent increase in digital commerce. Europe wholesale revenue increased 2 per cent on a reported basis.
Asia revenue in Q3 increased 5 per cent to $290 million on a reported basis, driven by solid growth in retail. Comparable store sales in Asia decreased 1 per cent, with growth in both brick and mortar and digital commerce operations more than offset by a decline in Hong Kong. Excluding Hong Kong, comparable store sales increased 2 per cent.
For fiscal 2020, the company expects net revenue growth in the range of 2 to 3 per cent on a constant currency basis. Company reported that their outlook continues to include the impact of tariffs and business disruptions in Hong Kong but does not include potential impact from the coronavirus outbreak in Asia, given the dynamic situation that the company is monitoring closely with regards to their employees, consumers, and supply chain.
Fibre2Fashion News Desk (JL)
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