Ralph Lauren Corp. (RL) reported second-quarter earnings on Tuesday that beat analysts' expectations, but the stock was falling in early trading.
The fashion retailer reported revenue of $1.69 billion, beating estimates of $1.65 billion. Sales in North America increased 1%. Earnings were $2.26 a share, beating estimates of $2.16.
The stock was down 5.74% to $128.95.
Ralph Lauren said sales in Europe, one of its most important segments, declined 1% year over year to $459.2 million from $463 million a year earlier. European sales accounted for roughly 28% of Ralph Lauren's total revenue for the quarter.
Still, the iconic clothing line -- priced for perfection at an earnings multiple of 53 due to a one-year stock gain of 55% -- has shown signs that it has been investing successfully in the right areas. Digital revenue increased 10%. The company just launched its Polo app, as well as its China e-commerce website. It has been looking to sell to a younger demographic. Marketing spending increased 30%.
The stock has risen 25% year to date.
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