Ralph Lauren (RL) - Get Free Report said it was closing about half of its 110 stores in China due to concerns about the spreading coronavirus pandemic, the company said during its third-quarter earnings call Tuesday.
China sales represent less than 4% of the company’s total revenue, and while Ralph Lauren does source some of its material from the country it refers to the market as “underpenetrated.”
“As far as supply chain is concerned … while the China opportunity is a massive growth opportunity to some extent, it’s a blessing to be underpenetrated today,” said CEO Patrice Louvet. “We are working on being as agile as possible and we’ll make sure we make the best of the situation that we’re dealing with.“
Net income for the quarter ended Dec. 28 was $334 million, or $4.41 a share, compared with $120 million, or $1.48, in the year-earlier quarter.
The latest adjusted earnings were $2.86 a share, beating the $2.45 consensus forecast in a FactSet survey.
Revenue increased 1.4% to $1.75 billion, ahead of Wall Street's call for $1.72 billion. Growth across all regions was led by Europe and Asia.
The company said it saw continued momentum in both core and underdeveloped categories, led by performance in the fleece and outerwear programs during the holidays.
North America revenue increased slightly to $911 million. In retail, comparable-store sales in North America were up 4%, driven by rises of 4% at brick-and-mortar stores and 6% at ralphlauren.com.
Europe revenue increased 3% to $438 million, while Asia revenue in the third quarter increased 5% to $290 million.
Ralph Lauren shares jumped 11.7% to $126.47 in trading on Tuesday.