American luxury group Ralph Lauren reported strong third-quarter results, with thanks to the holiday period.
Defying the downturn of the US dollar and any retail slump in the US, the results were boosted by double-digit sales growth at its own stores as well as increased sales to department stores, prompting them to raise their margin forecast.
Revenues for the third-quarter increased by 17 per cent to $US1.8 billion, whilst operating income rose 10 per cent to $US270 million.
“I am extremely proud of what we have accomplished in the first nine months of the fiscal year,” said Ralph Lauren, Chairman and CEO.
“Our design-driven culture is delivering highly desirable products across a growing range of lifestyle sensibilities and merchandise categories. We continue to support this innovation with best-in-class marketing, merchandising and distribution that not only distinguishes us in the marketplace, but also deepens our connection with our customers around the world. The progress we are making at our retail segment is very encouraging, particularly as we continue to invest in new stores and e-commerce worldwide.”
Wholesale sales were up 11 per cent with sales of $US750 million. Double-digit growth in theUS and Europe were supported by strong demand for core apparel merchandise, particularly men’s and childrenswear.
With international sales up by more than 40 per cent, sales in China had only been modest. It is reported that the company are in the middle of an overhaul of how it sells products in the highly competitive Chinese luxury market.
For the first nine months of Fiscal 2012, retail sales were up by 29 per cent, compared to the year prior with sales of $US2.7 billion. The sales breakdown reflected a 29 per cent growth at RalphLauren.com, an 8 per cent increase at Ralph Lauren stores, 14 per cent growth at factory stores and 19 per cent increase at Club Monaco stores.
“Our third quarter and year-to-date results affirm the resilience of our diversified operating model and the relevance of our strategic objects,” said Roger Farah, RL President and COO. “We’ve navigated through unprecedented gross margin pressure and challenging macro economic conditions while simultaneously supporting our global brand development efforts and maintaining excellent profitability. We believe sustained, disciplined investment in our growth initiatives, particularly our global retail and infrastructure development, will continue to yield strong returns for our shareholders over the long term.”
With the positive third-quarter results, Ralph Lauren expects consolidated revenue for Fiscal 2012 to increase by an estimated 20 per cent, compared with a prior forecast of a rise in the high teens or low 20 per cent range.
Image credit: ralph.lauren.com
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