Ralph Lauren (RL
128.45, +11.85) has jumped 10.2% after reporting upbeat quarterly results and
The apparel company reported above-consensus fourth quarter earnings of $0.90 per share on revenue of $1.53 bln, which declined 2.3% year/year, but was ahead of market expectations.
Going forward, Ralph Lauren expects that during fiscal year 2019, revenue will show a low-single digit decline while operating margin is expected to improve slightly due to gross margin expansion. Revenue during the first quarter of fiscal 2019 is expected to be flat or down slightly compared to the same quarter a year ago.
Returning to fourth quarter results, comparable store sales increased 4.0%. The growth rate was driven by a 24.0% increase in digital commerce sales in Europe. Total European comparable sales increased 7.0%. Comparable store sales in Asia rose 9.0%, while comparable sales in North America were unchanged due to an 18.0% drop in Digital commerce sales, which was offset by a 7.0% increase in North America sales, excluding digital commerce.
Operating income in Europe grew 13.3% to $420.00 mln while operating income in Asia jumped 16.9% to $256.80 mln. North America operating income fell 13.9% to $759.30 mln.
Gross margin improved to 59.8% from 55.4%. The increase was fueled by reduced promotional activity, favorable geographic and channel mix shifts, and improved product costs and product mix.
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