Ralph Lauren's Profit, Sales Beats Aren't Enough for Wall Street
(Bloomberg) -- Ralph Lauren posted profit and revenue that topped analysts’ estimates, though investors weren’t impressed with the flat sales growth and sent the shares lower.
- Companywide same-store sales, a key performance measure, were flat last quarter in constant currency terms, the company said Tuesday. Still, that beat the average projection for a drop of 0.6 percent.
- Investors have already propped the shares up a hefty 32 percent this year through Monday’s close. They may have been looking for stronger results to keep that momentum going.
- “The sales numbers are rather anemic and are characteristic of a brand that is still not entirely confident about its place in the fashion world or its future direction,” said Neil Saunders, managing director of GlobalData Retail.
- Ralph Lauren has been making a comeback by refocusing on classic styles such as polo shirts, sweaters and peacoats, and unveiled its first streetwear collaboration last month, signaling its interest in winning over younger shoppers.
- North America topped estimates with a 1 percent gain in comparable sales. The label has found success selling its preppy styles to consumers in Asia, where same-store sales jumped 6 percent, almost twice estimates. Europe meanwhile, continues to be a drag on the brand.
- The shares fell as much as 5.2 percent to $129.65 in New York. Their gain so far this year before Tuesday has far outpaced the 2.4 percent increase in the S&P 500 Index.
- For more on the results, click here.
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