New York—Reporting that it had a “spectacular year,” Ralph Lauren Corporation said today that its fourth quarter net income rose 29% on double-digit increases in its net revenue and comparable store sales.
For the quarter ended March 31, Ralph Lauren posted net income of $94.4 million, or 99 cents a share share, up from $73.2 million or 74 cents a share a year ago.
Net income for its fiscal 2012 was $681 million, or $7.13 a share.
Total net revenue was up 13.7% to $1.62 billion, helped by double-digit gains in both its wholesale and retail segments including a 12% comparable store sales increase and contribution from new stores. These offset a 1.6% decline in licensing revenue.
Ralph Lauren’s earnings easily beat analysts’ average estimate for 83 cents a share on sales of $1.60 billion.
For the company’s full year fiscal 2012, net revenues increased 21% to $6.9 billion, reflecting “strong retail and wholesale segment expansion, including mid-teens comparable store sales growth and favorable foreign currency effects.”
That news helped lift shares of the company today, especially after it announced it board of directors doubled its cash dividend.
Ralph Lauren: ‘Thrilled’ with Momentum in Handbags
“Fiscal 2012 was another year of spectacular growth for our company,” said Ralph Lauren, chairman/ceo. “We made significant progress with our international expansion efforts and we launched exciting new products during the year. I am thrilled with the momentum we are gaining with our handbags worldwide and we will continue to invest in innovation and distribution to support this high growth merchandise category.”
Lauren added that the company is transforming its presence in Greater China, “a region that we believe will become an important driver of growth for us over the long term, and have some magnificent new stores planned for the next several years.”
Noting that the company achieved its performance despite “unprecedented raw materials cost inflation” and uncertain economic conditions, Roger Farah, president/coo, added
“Much of our progress in Fiscal 2012 was achieved with market share and productivity gains in existing locations. As we look to the future, we believe we have significant potential to expand our distribution, particularly in international markets.”
Nonetheless, Farah said the company would be entering its 2013 fiscal year “cautious about near-term economic trends, particularly in Europe, and have planned the year accordingly. Whatever the near-term challenges may be, they do not alter our long-term growth expectations and our commitment to investing to support those goals.”
That more cautious view was evident in the company’s 2013 forecast which expects the current fiscal year to increase by just “mid-single digit percentage” reflecting a low single-digit decline in wholesale orders and a low double-digit increase in retail sales.
For its first quarter, Ralph Lauren Corp. expects sales to increase by “a low single-digit percentage” Wholesale sales are expected to be flat to slightly below the prior year period, as strength in North America is offset by a decline in Europe.
Fourth quarter results by division include: wholesale, where sales rose 10% to $828 million. The higher sales were supported by gains in North America and Europe, primarily as a result of continued momentum in core apparel merchandise and expanded distribution for accessories.
In its retail sales. Ralph Lauren posted sales increasing 19% to $752 million. Comparable store sales increased 12%, reflecting a 30% increase at RalphLauren.com, 5% growth at Ralph Lauren stores, a 10% increase at factory stores and 14% growth at Club Monaco stores. Total retail sales for its fiscal 2012 were up were up 27% to $3.4 billion.
Licensing royalties declined 2% to $43 million in the fourth quarter, mostly due to lower home product licensing royalties as a result of the transition of certain formerly licensed operations to directly controlled operations.