Ralph Lauren reported net loss in the first quarter of 128 million dollars or loss of 1.75 dollars per diluted share on a reported basis. On an adjusted basis, net loss was 133 million dollars or loss of 1.82 dollars per diluted share. This compares to net income of 117 million dollars or 1.47 dollars per diluted share on a reported basis, and net income of 142 million dollars or 1.77 dollars per diluted share on an adjusted basis, for the first quarter of fiscal 2020. Revenue decreased by 66 percent to 487 million dollars on a reported basis and down 65 percent in constant currency, with declines across all regions due to Covid-19 business disruptions. Foreign currency negatively impacted revenue growth by approximately 100 basis points in the first quarter.
Commenting on the trading update, Patrice Louvet, the company’s President and Chief Executive Officer said in a statement: “Our financial performance this quarter reflects an unprecedented three months of Covid-19-related impact around the world. We are taking the opportunity to leverage this period of disruption to accelerate our core strategic focus areas, drive new areas of growth, and realign our resources accordingly.”
The company said, North America revenue in the first quarter decreased 77 percent to 165 million dollars. In retail, comparable store sales in North America were down 64 percent, driven by a 77 percent decrease in brick and mortar stores and a 3 percent increase in digital commerce. North America wholesale revenue decreased 93 percent.
Europe revenue decreased 67 percent to 121 million dollars on a reported basis and decreased 64 percent in constant currency. In retail, comparable store sales in Europe were down 62 percent, with a 75 percent decrease in brick and mortar stores partly offset by a 44 percent increase in digital commerce. Europe wholesale revenue decreased 71 percent on a reported basis and decreased 68 percent in constant currency.
Revenue in Asia, during the quarter decreased 34 percent to 172 million dollars on a reported basis and decreased 32 percent in constant currency basis. Comparable store sales in Asia decreased 33 percent, with a 35 percent decline in brick and mortar stores partly offset by a 68 percent increase in digital commerce.
Gross profit for the first quarter was 349 million dollars and gross margin was 71.5 percent, while adjusted gross margin was 71.8 percent, 730 basis points above the prior year on a reported basis and up 880 basis points in constant currency. Operating loss, the company added, was 168 million dollars and operating margin was negative 34.5 percent on a reported basis. Adjusted operating loss was 174 million dollars and operating margin was negative 35.7 percent compared to positive 12.2 percent in the first quarter of fiscal 2020.
“We are living through an incredible period of change — whether related to the devastating spread of Covid-19 around the world or the call to systemically address racial injustice,” added Ralph Lauren, the company’s Executive Chairman and Chief Creative Officer.
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