Ralph Lauren Corporation on Thursday, February 4, forecast a bigger-than-expected drop in 4th quarter revenue, as the high-end apparel maker contends with new lockdowns in its major markets of Europe and Japan.
Many European governments put their economies back into lockdown late last year due to a spike in coronavirus cases, crimping sales to a major market for global luxury goods makers who were banking on a strong holiday shopping season to help ride out the hammering from the virus earlier in 2020.
The New York-based designer said it expects 4th quarter fiscal 2021 revenue to fall by mid-to-high single digits, while analysts were expecting a 2.9% drop, according to IBES data from Refinitiv.
“Our current outlook could be negatively impacted if government-mandated lockdowns or restrictions are extended,” the company said.
Echoing luxury goods rivals, Asia was a bright spot for Ralph Lauren in the 3rd quarter. Mainland China sales surged more than 40%.
Ralph Lauren on Wednesday, February 3, also said it would look to cut costs further for the fiscal year by consolidating its corporate offices and renegotiating store rents.
The company has already announced plans to cut 15% of its global workforce by the end of this fiscal year.
Adjusted net income fell over 42% to $125 million, or $1.67 per share, in the 3rd quarter ended December 26, but beat analysts’ estimates of $1.63.
Ralph Lauren’s gross margin rose 320 basis points, as it, like other luxury goods companies such as Tapestry Incorporated and Capri Holdings Ltd, cut shipments to discount-prone department stores.
Ralph Lauren said it plans to reinstate its quarterly dividend in the 1st half of fiscal 2022.
Net revenue fell 18.2% to $1.43 billion, missing estimates of $1.47 billion.
Shares were down about 1% before the bell. – Rappler.com
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