Feb 4, 2009
Polo posts lower quarterly profit
Feb 4, 2009
* Q3 adjusted EPS $1.06 tops Wall St view of 86 cts
* Cuts '09 view to $3.85-$4/shr; earlier expected $4-$4.10
* Shares rise 2.6 percent premarket
NEW YORK, Feb 4 (Reuters) - Polo Ralph Lauren Corp (RL.N) reported a much higher-than-expected quarterly profit on Wednesday, helped by stronger sales and profit margins in its international wholesale business, sending the fashion company's shares up 2.6 percent in premarket trade.
But the owner of the Polo, Chaps and Club Monaco brands experienced weakness in its domestic business and lowered its full-year outlook due to weak consumer spending.
Polo said net income fell to $105.3 million, or $1.05 per share, in the third quarter ended on Dec. 27 from $112.7 million, or $1.08 per share, a year earlier.
Excluding restructuring charges, the company earned $1.06 per share. Analysts on average were expecting 86 cents, according to Reuters Estimates.
The company said higher profit margins in its international wholesale business and a decline in purchase accounting amortization had more than offset lower profitability in its retail segment.
Net revenue fell about 1 percent to $1.25 billion.
Sales in the wholesale segment, which supplies clothes to department stores such as Macy's Inc (M.N), rose 5 percent to $655 million, driven by higher demand from abroad.
Strength in children's clothing and golf apparel in Japan and shipments of new products helped offset lower domestic volume, the company said.
Retail sales fell 7 percent to $547 million as sales at stores open at least a year fell 13.5 percent. Same-store sales fell 21.7 percent at Ralph Lauren stores, 9.1 percent at factory stores and 17.2 percent at Club Monaco stores.
The company lowered its outlook for fiscal 2009, which ends in March. It now expects to earn $3.85 to $4 per share, down from its prior forecast of $4 to $4.10.
Full-year net revenue is now expected to be flat to down at a low single-digit percentage rate, compared with a prior expectation for growth in the low single digits.
Polo shares rose to $40.75 in trading before the market opened from Tuesday's close of $39.70 on the New York Stock Exchange. (Reporting by Martinne Geller; Editing by Lisa Von Ahn)
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