Price Hikes Help Ralph Lauren Boost Profits -- Update
November 07 2019 - 1:27PM
Dow Jones News
By Suzanne Kapner
Ralph Lauren Corp. posted higher quarterly profit as the luxury
apparel maker pushes through price increases, helping offset some
of the rising costs due to tariffs on products imported from
China.
The Polo maker has been pulling back on promotions and
increasing prices in Asia and Europe. On a conference call
Thursday, Chief Executive Patrice Louvet said the company began
raising prices slightly at its North American outlet stores in late
September, and plans targeted price increases with its wholesale
partners and at its own full-line stores starting with its spring
2020 assortments.
Ralph Lauren's shares jumped more than 13% in Thursday trading
after the company reported higher-than-expected profit for its
fiscal second quarter. Net income was $182.1 million in the three
months to Sept. 28, up from $170.3 million a year earlier. The
profit growth was driven by higher gross margin and expense
control.
Total revenue was $1.71 billion, compared with $1.69 billion a
year earlier. North American sales fell 1%, dragged down by a 6%
decline in sales to third parties such as department stores.
The company lowered its full-year fiscal guidance slightly, in
part due to the protests in Hong Kong. Ralph Lauren stores in the
territory were closed for 48 days in the most recent period because
of the unrest.
Ralph Lauren executives said they have also mitigated the impact
of tariffs by reducing the amount of Chinese goods they import to
the U.S. The company's U.S. exposure to China will fall to 22% by
the end of this fiscal year, from over 40% two years ago, they
said.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
November 07, 2019 13:12 ET (18:12 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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