Ralph Lauren: revenue up in the second quarter

By

Olivier Guyot

Published
Oct 29, 2014

Ralph Lauren has lowered its growth forecasts for its 2015 financial year. The American group points out that with a constant exchange exchange rate it would have reached its objective of increasing revenue by 6% to 8%.

But, due to unfavorable currency exchange rates, the company has announced it prefers to lower its forecasts to 5% to 7%.

For its last quarter ending 27 September, Ralph Lauren shows 4% growth in its revenue compared to the same period last year, an amount that equals 1.994 billion US dollars.

The group was notably supported by its retail sales, up 7% to $1.01 billion dollars, while the wholesale segment edged up 1.6% to $943 million dollars and licenses brought in 45 million US dollars (+2%).

Worth noting is that the group was able to lean on its strategy of opening stores, with the inauguration of its Polo store on Fifth Avenue in New York and its first men's-women's flagship store in the "Greater-China" zone to support its retail activity. On a comparable basis, this has actually only gone up 1%.

"Despite the challenging global macroeconomic environment, we continue to experience strong momentum in key areas of strategic focus, including double-digit revenue growth internationally and for our e-commerce business," explains Jacki Nemerov, the group's chief operating officer. "We are achieving greater profitability for our activities, which helps us to finance our long-term objectives."

The group has indeed posted an operational margin of 14.4%, above its expectations following its store and marketing investments. Its gross profit margin widened to 56.8% from 56.6%, while operating expenses increased 7% to $846 million.

At the end of the third quarter, the group had 448 directly-operated stores, including 143 Ralph Lauren stores and 32 Club Monaco stores, but above all 243 Polo outlet stores. The company also has 494 concessions around the world. Its licensed affiliates around the world include 65 Ralph Lauren and 110 Club Monaco sales points.