US fashion firm Ralph Lauren's revenue surges 6% to $1.9 bn in Q3 FY24

Earnings per diluted share showed strength, rising by 31 per cent to $4.19 on a reported basis from the previous year. Adjusted earnings per diluted share also saw a significant uptick, increasing by 24 per cent to $4.17, compared to $3.20 on a reported basis and $3.35 on an adjusted basis in the third quarter of fiscal 2023, the company said in a media release.

Breaking down the revenue by region, North America showed resilience with revenue standing at $933 million, roughly on par with the previous year. The retail segment outperformed expectations with a 5 per cent increase in comparable store sales, driven by a 6 per cent rise in brick-and-mortar stores and a 4 per cent growth in digital commerce. However, North America's wholesale revenue faced a 15 per cent decline.

Europe presented a brighter picture with an 11 per cent increase in revenue to $522 million on a reported basis, and a 6 per cent growth in constant currency. Retail comparable store sales in Europe surged by 11 per cent, fuelled by strong performance both in brick-and-mortar stores and digital commerce. Wholesale revenue in Europe also saw a modest increase of 5 per cent on a reported basis.

Asia stood out with a 16 per cent revenue increase to $446 million on a reported basis and an impressive 17 per cent growth in constant currency. The region experienced a 14 per cent rise in comparable store sales, led by a notable 25 per cent increase in digital commerce.

Ralph Lauren’s gross profit for the quarter was $1.3 billion, with the gross margin reaching 66.5 per cent. Adjusted gross margin was slightly lower at 66.4 per cent but still represented a 120-basis points improvement over the prior year.

Operating expenses were reported at $968 million, marking a 7 per cent increase from the previous year. Despite this increase, the company managed to improve its operating margin to 16.4 per cent, both on a reported and adjusted basis, 40 basis points higher than the prior year.

Net income for Q3 FY24 was $277 million, or $4.19 per diluted share on a reported basis. Adjusted net income was slightly lower at $275 million, or $4.17 per diluted share, showcasing significant growth from the $216 million or $3.20 per diluted share reported in the third quarter of fiscal 2023.

"We delivered a strong holiday, with continued progress on our Next Great Chapter: Accelerate plan and third quarter results that exceeded our expectations led by continued momentum in our direct-to-consumer channels," said Patrice Louvet, president and chief executive officer. "These results underscore the diversity of our strategic growth drivers around the world in a still-volatile operating environment as well as our culture of operating discipline and agility."

ALCHEMPro News Desk (DP)