Ralph Lauren Corp. continued to play its game well in the fiscal second quarter — despite weakness in the North American wholesale business and a tougher economy.
The company has been on a campaign to elevate its brand and kept at it this quarter, boosting average unit retail prices at its own stores and on its website by 10 percent, on top of an 18 percent increase a year earlier.
That march higher has been driven by a number of components, from the kind of products sold to the prices charged to where they’re sold, and has helped fuel the business through a tricky consumer landscape.
Net income slipped modestly to $146.9 million from $150.5 million the prior year, although diluted earnings per share ticked up 1 cent to $2.19 given a change in the number of shares outstanding. (Altogether the company gave about $275 million back to shareholders through its dividend and share repurchases).
Adjusted EPS came in at $2.10 — well ahead of the $1.93 analysts projected, according to FactSet.
Revenues for the three months ended Sept. 30 increased 3.4 percent year-over-year to $1.63 billion from $1.58 billion, with gains in Europe and Asia offsetting wholesale weakness in North America. The company’s revenues came in $24 million over analysts’ best guess.
Patrice Louvet, president and chief executive officer, said: “Our teams delivered solid second quarter performance ahead of our commitments with stronger top-line growth across all regions, supported by our iconic brand, pricing power and continued strategic investments. While we continue to navigate an uncertain macro environment, we are driving offense across our Next Great Chapter: Accelerate plan’s multiple growth drivers with agility, discipline and a clear focus on what we can control.”
North American sales slipped 1 percent from the prior year, to $718 million for the quarter, which included a 4 percent increase in the direct to consumer business and a 7 percent decline at wholesale, which has been a trouble spot across the fashion industry.
Revenues in Europe increased 7 percent to $527 million as Ralph Lauren’s take in Asia rose 10 percent to $348 million.
Ralph Lauren, who serves as executive chairman and chief creative officer, said: “We inspire people to embrace their sense of individual style through a timeless, elegant way of living. From our recent fashion show in Brooklyn to championing the resilience of sport at the U.S. Open, Wimbledon and Ryder Cup, there is a spirit of authenticity to everything we do and it endures beyond any economic or fashion cycle.”