Net income soared by 52% to $168 million, or $1.72 per share, from $111 million, or $1.10 per share a year earlier, beating analysts’ average for $1.25 per share. In early trading the company’s shares spiked almost 9% by noon. The company said Wednesday that it will double its dividend.
Sales revenue rose 25% to $1.5 billion to $1.2 billion last year, against exceeding analysts’ average estimate of $1.45 billion.
“Our exceptional third quarter and year to date results confirm we are gaining substantial and profitable market share around the world,” said Roger Farah, president and ceo. “Having assumed direct control of our South Korean distribution on January 1, we have completed an important initial phase of a broader Asian strategy that is expected to transform our company over the long term.”
Full Year Revenue: ‘Increase in Low Double Digits’
Polo’s wholesale revenue rose 21% to $676 million, buoyed increased shipments of apparel and accessories to the United States and Europe. Its retail revenue rose 29% to $822 million, helped by sales in Asia. Operating expenses rose just 20%, the company said.
Comparable store sales, a gauge of retail performance, rose 15%, including a 7% increase at Ralph Lauren stores, a 15% increase at its outlet stores, and a 12% hike at its Club Monaco division. Its online sales also surged, rising 33%.
Polo’s results speak to the “global reach of this iconic company” as well as its ability to its ability to offset rising prices on raw materials such as cotton and investment spending as it expands in emerging markets, said Brian Sozzi, analysts at Wall Street Strategies.
Looking ahead, the company expects full-year revenues to increase by a low double-digit percentage, helped by the addition of its South Korean retail operations from the fourth quarter. It has also raised its profit outlook for the year, with operating margin to be flat with the previous year and not down by 50 basis points, which it had originally expected.
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