Ralph Lauren Corporation (NYSE:RL) today reported net income of $169 million, or $1.78 per diluted share, for the third quarter of Fiscal 2012, compared to net income of $168 million, or $1.72 per diluted share, for the third quarter of Fiscal 2011.
Net income for the first nine months of Fiscal 2012 rose 19% to $587 million from $494 million in the comparable period last fiscal year. Net income per diluted share of $6.14 in the first nine months of Fiscal 2012 was 23% greater than the $5.01 reported in the prior year period.
“I am extremely proud of what we have accomplished in the first nine months of the fiscal year,” said Ralph Lauren, Chairman and Chief Executive Officer. “Our design-driven culture is delivering highly desirable products across a growing range of lifestyle sensibilities and merchandise categories. We continue to support this innovation with best-in-class marketing, merchandising and distribution that not only distinguishes us in the marketplace, but also deepens our connection with our customers around the world. The progress we are making at our retail segment is very encouraging, particularly as we continue to invest in new stores and e-commerce worldwide.”
“Our third quarter and year-to-date results affirm the resilience of our diversified operating model and the relevance of our strategic objectives,” said Roger Farah, President and Chief Operating Officer. “We’ve navigated through unprecedented gross margin pressure and challenging macroeconomic conditions while simultaneously supporting our global brand development efforts and maintaining excellent profitability. We believe sustained, disciplined investment in our growth initiatives, particularly our global retail and infrastructure development, will continue to yield strong returns for our shareholders over the long term.”Third Quarter and Nine Months Fiscal 2012 Income Statement Review Net Revenues. Net revenues for the third quarter of Fiscal 2012 were $1.8 billion, 17% greater than net revenues for the comparable period last year. The increase in net revenues primarily reflects growth in retail sales worldwide and double-digit wholesale revenue growth in the United States and Europe. Net revenues for the first nine months of Fiscal 2012 were $5.2 billion, 24% greater than the comparable period of Fiscal 2011. The increase in net revenues primarily reflects strong retail sales worldwide, higher wholesale revenues and favorable foreign currency effects.
- Wholesale Sales. Wholesale sales of $750 million in the third quarter were 11% above the prior year period. Double-digit growth in the United States and Europe was supported by strong demand for core apparel merchandise, particularly men’s and childrenswear. Wholesale revenue growth also benefited from the transition of certain formerly licensed home product categories to directly controlled wholesale operations. The transition of certain Japanese wholesale distribution to directly operated concession shops was a meaningful offset to wholesale revenue growth in the third quarter.For the first nine months of Fiscal 2012, wholesale sales were $2.4 billion, 19% above the prior year period. The year-over-year increase in wholesale sales reflects higher global demand for core apparel merchandise and growing distribution of emerging accessories products. Year-to-date wholesale sales also include incremental home product revenues as a result of the transition of certain formerly licensed home product categories to directly controlled wholesale operations. The transition of certain Japanese wholesale distribution to directly operated concession shops was a partial offset to wholesale revenue growth in the first nine months of Fiscal 2012.
- Retail Sales. Retail sales rose 22% to $1.0 billion from $822 million in the third quarter last year, reflecting the contribution from new stores and concession shops, including incremental revenues from newly transitioned South Korean operations, and comparable store sales growth. Comparable store sales increased 12%, reflecting a 31% increase at RalphLauren.com, 7% growth at Ralph Lauren stores, 9% expansion at factory stores and 17% growth at Club Monaco stores.Retail sales for the first nine months of Fiscal 2012 were $2.7 billion, 29% above the prior year period. Year-to-date comparable store sales rose 14%, reflecting 29% growth at RalphLauren.com, an 8% increase at Ralph Lauren stores, 14% growth at factory stores and 19% expansion at Club Monaco stores.
- Licensing. Licensing revenues of $50 million in the third quarter were 1% below the prior year period. Higher domestic apparel product licensing and global fragrance royalties were more than offset by lower international and home product licensing royalties due to the transition of certain formerly licensed operations to directly controlled operations.Licensing royalties of $137 million in the first nine months of Fiscal 2012 were 2% greater than the prior year period. Higher domestic apparel product licensing royalties more than offset lower international and home product licensing royalties due to the transition of certain formerly licensed operations to directly controlled operations.
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