This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Ralph Lauren Reports Third Quarter Fiscal 2012 Results

Operating Expenses . Operating expenses increased 15% in the third quarter to $761 million from $662 million in the third quarter of Fiscal 2011. The increase in operating expenses primarily reflects overall business expansion, including strong retail segment growth, in addition to incremental costs associated with the transition of certain formerly licensed operations. Operating expense margin was 42.2%, a 50 basis point improvement from the comparable prior year period. The lower operating expense margin was a result of leverage on strong sales growth and a shift in timing of certain expenses into the fourth quarter.

Operating expenses in the first nine months of Fiscal 2012 were $2.2 billion, 22% greater than the prior year period. Operating expense margin was 41.4%, a 60 basis point improvement from the first nine months of Fiscal 2011, as leverage on strong sales growth more than offset incremental costs associated with the transition of certain formerly licensed operations, higher retail segment penetration and continued investment in the Company's strategic growth initiatives.

Operating Income . Operating income for the third quarter of Fiscal 2012 rose 10% to $270 million from $246 million in the third quarter last year. Operating margin was 15.0%, or 90 basis points below the third quarter last year, primarily due to gross margin compression that was partially offset by operating expense leverage.

For the first nine months of Fiscal 2012, operating income increased 24% to $903 million from $728 million in the prior year period. Operating margin for the first nine months of Fiscal 2012 was 17.2%, essentially unchanged from the prior year period. The stability in operating margin rate reflects an equivalent amount of operating expense leverage to offset gross margin compression.

  • Wholesale Operating Income. Wholesale operating income declined 11% to $116 million in the third quarter of Fiscal 2012 from $130 million last year. Wholesale operating margin was 15.4% in the third quarter, 390 basis points below the prior year period, primarily as a result of cost of goods inflation, incremental expenses associated with the transition of certain formerly licensed home operations and the global launch of Denim & Supply.Wholesale operating income increased 8% in the first nine months of Fiscal 2012 to $513 million from $476 million last year. Wholesale operating margin for the first nine months of Fiscal 2012 was 21.2%, or 230 basis points below the prior year period, primarily a result of cost of goods inflation and incremental expenses associated with the transition of certain formerly licensed home operations. Expense leverage on higher global wholesale sales partially mitigated the decline in wholesale operating margin.
  • Retail Operating Income. Retail operating income was $194 million, 27% greater than the $153 million achieved in the third quarter of Fiscal 2011, and retail operating margin was 19.3% compared to 18.6% in the prior year period. The growth in retail operating income and the expansion in margin are a result of strong comparable store sales growth and improved profitability in international markets. The improved retail segment profitability was partially offset by cost of goods inflation and continued investment in global e-commerce development.Retail operating income increased 42% in the first nine months of Fiscal 2012 to $514 million from $362 million in the prior year period, and the retail operating margin was 19.2%, or 170 basis points greater than the first nine months of Fiscal 2011. The growth in retail operating income and the expansion in margin are a result of strong comparable store sales growth and improved profitability in international markets. The improved retail segment profitability was partially offset by cost of goods inflation and expenses related to newly transitioned South Korean operations.
  • Licensing Operating Income. Licensing operating income increased 7% to $32 million from $30 million in the third quarter of Fiscal 2011, primarily due to lower net costs associated with the transition of formerly licensed operations to directly controlled operations.Licensing operating income for the first nine months of Fiscal 2012 rose 7% to $87 million from $81 million in the prior year period, primarily due to lower net costs associated with the transition of formerly licensed operations to directly controlled operations.

Net Income and Diluted EPS . Net income of $169 million for the third quarter of Fiscal 2012 was slightly above the $168 million earned in the prior year period. The increase in net income reflects the higher operating income discussed above that was almost entirely offset by higher taxes. The effective tax rate of 36% in the third quarter of Fiscal 2012 compares to 29% in the prior year period, primarily due to the favorable resolution of discrete tax items in the third quarter of Fiscal 2011. Net income per diluted share rose 3% to $1.78 per share from $1.72 in the third quarter last year. The increase in diluted EPS for the third quarter of Fiscal 2012 reflects lower average diluted shares outstanding compared to the prior year.

Net income for the first nine months of Fiscal 2012 rose 19% to $587 million from $494 million last year. Net income per diluted share of $6.14 in the first nine months of Fiscal 2012 was 23% greater than the $5.01 earned in the prior year period. The growth in net income and diluted EPS results for the first nine months of Fiscal 2012 principally relates to the higher operating income discussed above that was partially offset by an effective tax rate of 34% compared to 31% in the prior year period. The higher effective tax rate for the first nine months of Fiscal 2012 primarily reflects the favorable resolution of discrete tax items in the prior year.

2 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs