Ralph Lauren Corp. continued to make progress in the second quarter, looking beyond the economy and building on its higher brand positioning.
Still, the end result couldn’t keep up with the go-go days seen a year ago.
The company’s net income fell to $150.2 million, or $2.18 per share, from $193.3 million, or $2.57, a year earlier. Adjusted earnings per share also fell, to $2.23 from $2.62 a year earlier, but better than the $2.08 that analysts had forecast.
Revenue for the three months ended Oct. 1 rose 5 percent to $1.58 billion from $1.5 billion, an increase of 13 percent in constant currencies.
In Asia, sales increased more than 30 percent in constant currencies, while Europe increased in the middle of the decade and North America saw low-single-digit growth.
Gains in Asia stand out as many brands have struggled amid COVID-19 lockdowns in the market, forcing Ralph Lauren to close 35 per cent of its stores in Greater China.
Patrice Louvet, President and CEO, said, “At our Investor Day in September, we outlined our next phase of growth for our company, our ‘Next Big Chapter: Plan Accelerat’, focused on continued brand elevation, expansion category growth and scaling of our key urban ecosystems around the world Our multiple growth engines helped deliver strong results in the second quarter with outperformance in both revenue and bottom line as we continue to navigate a highly dynamic global operating environment with agility and a relentless focus on building our brand momentum.”
Louvet has been on a mission to take Ralph Lauren higher up the fashion ladder and continued that momentum in the quarter, with average unit retail prices rising 18 percent in its direct-to-consumer network, in addition to rising 15 percent observed a year. behind.
While inflation might explain some of that, it wouldn’t explain the entire increase. The company attributed pricing power to “a compelling product offering and promotional discipline.”
While many fashion companies have lowered their annual outlooks significantly due to the stress of soaring inflation, higher interest rates, and the looming recession, Ralph Lauren is largely holding its own.
The company continues to expect revenue to grow in the high single digits, although adjusted operating margins are forecast to be at the lower end of the previous range of 14 to 14.5 percent.
“Our brand has always been built on optimism, inspiring dreams and a sense of possibility,” said Ralph Lauren, CEO and Chief Creative Officer. “For more than five decades, people around the world have connected with these ideas in powerful ways, trusting Ralph Lauren time and time again to deliver quality, timelessness and authenticity.”