REPORT_ Ralph Lauren Corporation reported net income of 201 million dollars, or 2.25 dollars per diluted share, for the second quarter of fiscal 2015, compared to net income of 205 million dollars, or 2.23 dollars per diluted share, for thesecond quarter of fiscal 2014. Net revenues for the second quarter increased 4 percent to 2 billion dollars led by retail segment expansion, including double-digit international growth.

“It’s been an incredibly active and exciting last few months for our company,” said Ralph Lauren, Chairman and Chief Executive Officer, adding, “We achieved several critical goals, including the launch of Polo for women, the opening of our first Polo flagship store on Fifth Avenue, and our first dual-gender Ralph Lauren flagship in Greater China. These milestones showcase the strength and scope of our luxury positioning and represent some of our most compelling opportunities.”

Wholesale segment sales were 943 million dollars, 2 percent above the prior year period, reflecting growth in all geographic regions. Retail sales rose 7 percent to 1 billion dollars in the second quarter, led by double-digit growth internationally and for global e-commerce operations. Consolidated comparable store sales increased 1 percent on both a reported and constant currency basis during the second quarter. Licensing revenues of 45 million dollars in the second quarter were 2 percent above the prior year period, reflecting higher royalties from increased sales of Ralph Lauren products.

Gross profit for the second quarter improved 4 percent to 1.1 billion dollars. Gross profit margin of 56.8 percent was 20 basis points above the prior year period, primarily due to favorable channel and geographic mix. The company ended the second quarter with 448 directly operated stores, comprised of 143 Ralph Lauren stores, 62 Club Monaco stores and 243 Polo factory stores. The company also operated 494 concession shop locations worldwide at the end of the second quarter. In addition, international licensing partners operated 65 Ralph Lauren stores and 20 dedicated shops, as well as 110 Club Monaco stores and shops at the end of the second quarter.

The company is maintaining its constant dollar outlook for fiscal 2015. However, as a result of recent, unfavorable foreign currency movements, the company now expects consolidated net revenues for fiscal 2015 to increase by 5 percent to 7percent compared to its previous outlook of 6 percent to 8 percent growth. The fiscal 2015 operating margin is still estimated to be approximately 75-125 basis points below fiscal 2014’s level, likely at the mid-to-low end of that range due to incrementally negative foreign currency movements. In the third quarter, the company expects consolidated net revenues to increase by 3 percent-5 percent, including a 200 basis point net negative impact from foreign currency translation.


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