Ralph is still expecting that second-half turnaround.

Fashion house Polo Ralph Lauren ( RL) reported a steep decline in net income for the first quarter -- although a smaller drop than Wall Street expected -- but was upbeat on the remainder of the year. The sunny comments followed recent earnings warnings from other apparel companies and a drop in consumer confidence, data that have many observers doubting a second-half turnaround.

New York-based Ralph Lauren reported net income of $6.5 million, or 7 cents per share, down 79% from net income of $31.1 million, or 32 cents a share, in the year-ago period. On a pro forma basis, which excludes certain items such as foreign currency gains and losses, the company reported earnings of 9 cents a share, or 3 cents better than the number expected by analysts, according to Thomson Financial/First Call.

Ralph shares, which are off about 22% on the year, were up 59 cents, or 3%, at $20.49.

The company affirmed its guidance going forward. It expects full-year earnings between $1.80 and $1.90, compared with $1.71 last year. The second and third quarter should come in as follows: 48 cents to 53 cents in the second and 45 cents to 50 cents in the third. In the fourth quarter, Ralph expects earnings of 75 cents to 80 cents.

"Looking ahead, I remain confident in our ability to deliver profitable growth in the coming year," said Ralph Lauren, chairman and CEO, in a statement. "Our company is in the strongest position ever and our brands continue to thrive."

In a conference call with investors, management admitted the retail environment is "fairly turbulent" but said that it expects an uptick in late September, which it says should continue for the remainder of the year.

The comments came just as many analysts have been saying that a second-half turnaround looks increasingly tenuous, given recent earnings warnings in the apparel sector and a fall in consumer confidence in July. Recently, apparel companies Hot Topic ( HOTT), Wet Seal ( WTSLA) and Children's Place ( PLCE) warned that earnings are weak. And as the major retailers prepare to report July sales figures on Thursday, many are expecting more bad news.

But Ralph appears in solid position to weather any downturn. It has $371.6 million in cash, or $21.2 million more than its debt of $350.4 million. The company said it would use the cash for acquisitions and to open new stores next spring and fall.