Ralph Lauren looking lively
November 10, 2003-- Home Textiles Today,
Fueled by double-digit gains from licensing revenues and in its tony retail stores, second-quarter profits at Polo Ralph Lauren Corp. rose by 4.4 percent, to $54.0 million from $51.7 million last year.
Overall sales jumped up by 10.2 percent, to $633.2 million from $574.6 million. Licensing revenues, including those from the Ralph Lauren Home unit of WestPoint Stevens, climbed by 12.4 percent, to $74.5 million from $66.3 million last year. Sales in Lauren stores ran up even faster, by 12.6 percent, to $297.1 million from $263.8 million. Same-store sales in Lauren flagship stores shot up a heady 8.3 percent. Rounding out the top line, wholesale sales to Lauren-branded products to other retailers increased by 8.2 percent, to $336.1 million from $310.7 million last year, and accounted for almost half of total company sales.
Virtually all of the increase in profits stemmed from higher sales, offsetting margin erosion and sharply higher costs. Acting as a drag and capping operating profits, average gross margin narrowed by 60 basis points, or six-tenths of a percentage point, to 49.5 percent from 50.1 percent a year ago. Margins, the company said, were hampered by "softness in the European wholesale business and the promotional environment at department stores in men's wholesale, partially offset by strong increases in retailer merchandise margins."
Costs climbed higher by one full percentage point, to $248.6 million from $218.6 million, driven by a change in business mix from increased retail sales, the start-up costs of the Lauren line and the consolidation of expenses of the Japanese master
Ralph Lauren Corp.
|Qtr. 9/27 (x000)||2003||2002||% chg|
|a-Second-quarter results include a $1.8 million gain on foreign currency exchange, compared with a year-before loss of $221,000; and $1.6 million in miscellaneous investment income. Six-month results include a $4.1 million gain on foreign currency exchange vs. a prior-year loss of $3.8 million; and $3.5 million in miscellaneous investment income.
|Oper. income (EBIT)||102,012||102,632||-0.6|
|Per share (diluted)||0.54||0.52||3.8|
|Average gross margin||49.5%||50.1%||—|
|Six months||2003||2002||% chg|
|Oper. income (EBIT)||128,980||138,782||-7.1|
|Per share (diluted)||0.59||0.59||0.0|
|Average gross margin||50.6%||50.0%||—|
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