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Ralph Lauren Beats Quarterly Revenue Estimates

The American fashion brand said it was able to sell products at higher prices — and increase margins — thanks to a ramp up in social media marketing, which has helped lift its brand image.
Ralph Lauren store | Source: Shutterstock
By
  • Reuters

NEW YORK, United States — Ralph Lauren Corp beat market expectations for the holiday-quarter profit on Tuesday, as higher prices for its winterwear boosted margins, sending the fashion house's shares up 6 percent in premarket trading.

The company has said it could sell products at higher prices due to a ramp up in marketing, especially on social media through supermodels and actors, which has helped lift its brand image.

Its marketing expenses rose 16 percent in the third quarter, while average prices at its own stores and website gained 6 percent. Ralph Lauren said its adjusted gross margin rose by 60 basis points.

Net revenue rose 1.4 percent to $1.75 billion in the quarter ended December 28, inching past average analysts' estimate of $1.72 billion, according to IBES data from Refinitiv.

Ralph Lauren said it expects fiscal 2020 revenue, excluding fluctuations in foreign exchange, to rise 2 percent to 3 percent. This does not include any potential impact from the outbreak of a new coronavirus in China.

The company's net income rose nearly three-fold to $334.1 million, or $4.41 per share, lifted by a one-time tax benefit.

Excluding one-time items, the New York-based company earned $2.86 per share, beating analysts' expectation of $2.45 per share.

By Uday Sampath; editors: Saumyadeb Chakrabarty and Arun Koyyur.

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