Submitted by Fox First at Ten on November 2nd
NEW YORK (AP) - Ralph Lauren says reduced wholesale shipments to Europe and a tax cost drove its fiscal second-quarter net income down by 8 percent, and the clothing company trimmed its revenue expectations for the year amid a global economic slowdown.
The company also said that Superstorm Sandy is affecting the current quarter, which runs through December, but it's too early to tell how much.
"At this point, we know we have lost a modest amount of revenue for the third quarter, but there are still some uncertainty with respect to the lingering impact the hurricane might have on future sales," Chris Peterson, Ralph Lauren's senior vice president and chief financial officer told investors during a call Friday.
Ralph Lauren said that about a dozen of the 81 stores that were closed Monday have been re-opened. Peterson also said Ralph Lauren's online sales were disrupted as many shoppers lost electricity.
The 45-year-old owner of the Ralph Lauren Collection and Polo by Ralph Lauren brands sells its products at department stores, its own shops and through other retailers.
In the three months through Sept. 29, net income fell to $213.7 million, or $2.29 per share, from $233.5 million, or $2.46 per share, last year. Analysts expected $2.15 per share.
Revenue fell 2 percent to $1.86 billion. Analysts expected $1.83 billion. A planned reduction in shipments to some European stores that carry its lines hurt revenue. The company's business has also been hurt by the phasing out of its American Living brand, which had been exclusively carried by mid-price department store chain J.C. Penney.
Ralph Lauren also says it plans to discontinue its Rugby brand to focus on more profitable brands.
Sales at Ralph Lauren's own stores, however, rose 5 percent to $901 million, as revenue at stores opened at least a year rose 3 percent.
Looking forward, the company expects that revenue will grow 2 to 3 percent in fiscal 2013. It had previously predicted revenue would grow in the mid-single-digits.
Shares rose $2.17, or 1.4 percent, to $161.21 in late trading Friday.
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