Apparel maker Ralph Lauren Corp. (RL: Quote) reported Tuesday a 29 percent year-over-year growth in profit for the fourth quarter, reflecting improved margins, lower effective tax rate and double-digit revenue growth. Both earnings per share and quarterly revenues topped analysts' expectations.
Ralph Lauren also provided revenue growth guidance for the first quarter and for the full-year 2013, both below Street view. However, The company's stock is up more than 5 percent in early deals after its board authorized the doubling of its quarterly cash dividend.
The New York-based fashion company, whose brands include Polo, American Living, Chaps and Club Monaco, reported net income of $94.4 million or $0.99 per share, higher than $73.2 million or $0.74 per share in the prior-year quarter.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.83 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Net revenues for the quarter grew 13.7 percent to $1.62 billion from $1.43 billion in the same quarter last year, and topped thirteen Wall Street analysts' consensus estimate of $1.60 billion by a whisker.
The company said growth in revenues reflects double-digit gains in both wholesale and retail segments amid 12 percent comparable store sales growth and contribution from new stores. This was partially offset by a marginal 1.6 percent decline in licensing revenues.
Operating margin for the quarter improved 20 basis points to 8.4 percent, primarily due 30 basis points improvement in gross margin, partially offset by 10 basis points increase in operating expense as a percentage of total revenues. Higher cost of goods negatively impacted margins.
For fiscal 2012, the company reported net income of $681 million or $7.13 per share, up from $568 million or $5.75 per share in fiscal 2011. Sales for the year increased 21 percent to $6.9 billion from last year.
Street was looking for full-year 2012 earnings of $6.99 per share, on annual revenues of $6.83 billion.
"Our Fiscal 2012 performance is particularly noteworthy considering the unprecedented raw materials cost inflation and highly uncertain market conditions that persisted throughout the year. Much of our progress in Fiscal 2012 was achieved with market share and productivity gains in existing locations," President and Chief Operating Officer Roger Farah said in a statement.
The company's board declared a 100 percent increase in the regular quarterly cash dividend on its common stock to $0.40 per share, with the next quarterly dividend payable on July 13 to shareholders of record at the close of business on June 29, 2012.
"And while we enter Fiscal 2013 excited about our global growth initiatives, we are cautious about near-term economic trends, particularly in Europe, and have planned the year accordingly," Farah added.
Looking ahead to the first quarter, the company expects consolidated revenues to increase by a low single-digit percentage, with analysts expecting revenues to grow 9.3 percent to $1.67 billion.
For fiscal 2013, the company currently anticipates consolidated revenues to increase by a mid-single-digit percentage. Street is currently looking for full-year 2013 revenues to grow 10.8 percent to $7.57 billion.
RL closed Monday's regular trading session at $146.30, up $4.24 on a volume of 2.59 million shares.
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by RTT Staff Writer
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