Polo Ralph Lauren Guides Margins Higher

It cites improved full-price sellthrough at the retail and wholesale levels.
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The party in retail's penthouse continues.

Luxury apparel maker

Polo Ralph Lauren

(RL) - Get Report

said Friday that limited discounting at the wholesale and retail levels coupled with cost controls will result in better-than-expected margins for its first quarter ended July 2.

Operating margin in the quarter is now forecast at 5 to 5.5 percentage points above the 3.7% Polo put up in the year-ago quarter. The company previously said it expected margins to rise just under 3.7 percentage points from a year earlier. Polo continues to expect sales to rise 20% from a year earlier, consistent with previous guidance.

The company didn't provide specific EPS guidance. Analysts surveyed by Thomson First Call expect Polo to earn 25 cents a share on sales of $694 million in the July quarter.

"Our retail and wholesale businesses are reporting strong revenue gains that were driven by better full-price sell-throughs," he company said. "In addition, we were able to better leverage our incremental sales through improved expense management."

Since the first quarter is usually the company's smallest contributor to full-year earnings, Polo declined to update its full-year guidance Friday.

The stock closed at $43.47 Thursday. The 52-week high is $44.70.