The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
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.
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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.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.
Consumers face less, not more, choice if handbag brands can't scale up to compete with LVMH, argues Andrea Felsted.
As the French luxury group attempts to get back on track, investors, former insiders and industry observers say the group needs a far more drastic overhaul than it has planned, reports Bloomberg.