Ralph Lauren Beats Expectations, Buyback of Stock Announced
On Thursday morning, Ralph Lauren Corporations posted a profit that dropped by 77% during its most recent quarter as sales and margins at the apparel company were hit by a move of clearing inventories in its business in the U.S.
However, company shares were up over 3.5% in early premarketing trading as earnings per share, excluding special items, beat expectations on Wall Street and its revenue ended just higher that estimates.
The board at Ralph Lauren authorized a company stock buyback of another $200 million.
Stefan Larsson the CEO, who has conducted a complete review of the company, said in his prepared statement that the company would be disclosing details of a new strategic plan of strengthening the brand and drive profits. The plan will be announced June 7, its investor day.
Larsson spoke of the review last February after the company reported a drop of 39% in its profit for the quarter and lowered its outlook of sales for the ongoing year.
Back then, he announced that he wanted more focus brought to the business and was taking a look at the distribution and pricing. He said he was also looking at business with different department stores like Nordstrom and Macy’s.
One day prior to Ralph Lauren posting its results, Macy’s set of new fears about the retail sector’s health in the U.S. after the largest chain of department stores in the country posts its worst sale for a quarter since the 2008 recession.
Nordstrom will release its results for the first quarter Thursday following the bell.
Larsson, who became the CEO with Ralph Lauren last year after leaving his post with Old Navy, made a number of management shifts, which included the elimination in February of the president of global brands.
During February, the company said it would move in-house some of its supply-chain operations.
That shift, which is part of what the company says is action that was long-planned, will move inventory and warehousing management service from one distribution center in North Carolina to a far larger and new distribution center that will be operated by the retailer.
Overall, for its period ending April 2, the apparel company posted $41 million in profit equal to 49 cents per share, which was down from last year during the same period of $124 million equal to $1.41 per share, for the same time one year ago.
Excluding charges related to restructuring and other special items, its adjusted earnings per share dropped from $1.41 to 88 cents.
Revenue was just 0.7% ending the quarter at $1.87 billion.
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