First Quarter Fiscal 2008 Income Statement Review:
Net Revenues. Net revenues for the first quarter of Fiscal 2008 increased 12% to $1.07 billion, compared to $954 million for the first quarter last year.
The gains were driven by a 17% increase in wholesale sales and a 9% increase in retail sales that were slightly offset by an 8% decrease in licensing revenues, primarily due to the elimination of Japanese royalties associated with our Impact 21 acquisition (that business is now consolidated as a part of the wholesale segment).
Excluding the impact of non-comp acquisitions (Impact 21 and small leathergoods), first quarter net revenues increased 7%.
Gross Profit. Gross profit for the first quarter increased 11% to $592 million, compared to $532 million in the first quarter of Fiscal 2007.
On a reported basis, gross profit rate declined 40 basis points to 55.3%, compared to 55.7% during the same period last year, due to the effect of purchase accounting related to our recent acquisitions (Japan businesses, Ralph Lauren Media, and small leathergoods).
Excluding the effect of recent acquisitions, our gross profit rate increased slightly, primarily due to strong European wholesale performance.
Operating Expenses. Operating expenses increased 12% in the first quarter to $446 million, compared to $398 million in the first quarter of Fiscal 2007. On a reported basis, expenses as a percent of revenues were 41.7%.
The expense rate was flat to last year, despite higher costs related to the non-cash effect of purchase accounting and startup expenses related to new products launching in the fourth quarter of Fiscal 2008.
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Polo Ralph Lauren Corporation
marketing@alchempro.com
