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Ralph Lauren beats Street amid marketing blitz

Ralph Lauren Corp. reported a solid first quarter amid a big increase in marketing blitz and the launch of limited edition apparel, including for its signature Polo Sport shirts. The company upped its marketing investment by 19% over the same period last year.

“One of the recent success stories at Ralph Lauren is the elevation in marketing which has been designed to reaffirm the status of the brand, not just with traditional consumers but also among younger shoppers who might be less familiar with the offering,” said analyst Neil Saunders, managing director, GlobalData Retail. “Our own data shows that this is working as both awareness and affinity with the under 35s has picked up significantly in the past half-year.” (For more analysis, click here.)

The luxury clothing and accessories company reported net income of $117.1 million, or $1.47 per share, for the quarter ended June 29, up from $109.0 million, or $1.31 per share, in the year-ago period. Adjusted earnings per share came in at $1.77, beating analysts’ estimates of $1.66.

Revenue increased 3% to $1.43 billion, beating Street estimates of $1.42 billion. North America revenue in the increased 3% to $719 million. In retail, same-store store sales in North America were up 1%, driven by a 1% comp in brick-and-mortar stores and flat comps at European same-store sales grew 4%, and Asian same-store sales were up 5%.

“We delivered first-quarter results in line with our overall expectations, with better than expected operating margin and double-digit EPS growth,” said Patrice Louvet, president and CEO. “Our performance was driven by strong continued momentum in our international markets and expense discipline across the organization, while we continued to invest in elevating our brands and stabilize our North America business against a more volatile backdrop.”
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