Friday, August 12, 2011

Polo Ralph Lauren Reports First Quarter Fiscal 2012 Results

Net revenues for the first quarter of Fiscal 2012 increased 32% to $1.5 billion as compared to $1.2 million in Q1 2011 and better then the expected $1.43 billion. Operating income rose 62% to $282 million. Net income for the first quarter increased 52% to $184 million while diluted EPS increased 57% to $1.90 per share better then analysts’ estimates of $1.45.

The company credits strong comparable stores growth and improvement across most retail concepts for the increase in retail operating income, which rose 67%. Cost of goods inflation as well as incremental expenses for South Korean operation offset retail-operating income. Wholesale operating income rose 40% due to higher global shipment volumes. Licensing operating income rose 6% to $25 million. Comps at the segment level included: 14% at Ralph Lauren, 20% at Factory Stores, 16% at club Monaco and 28% at

Management provided guidance for the second quarter of 2012 as they expect consolidated revenues to increase at a high teens to low 20% rate. Wholesale revenues are expected to grow at a mid teens rate at a second quarter while retail sales are expected to grow at a mid 20% rate. RL has performed well in spite of consumer sentiment and rising costs beating analyst expectations. RL has proven that they can mitigate the macro commodity increases more effectively than comparable peers and UASBIG expects the company will continue to perform favorably for our portfolio.


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