Ralph Lauren began its fiscal year with a 4% decrease in net revenue to $1.4 billion, as well as a 5% decrease in wholesale revenue, a 3% decrease in retail revenue and an 8% decrease in licensing revenue. International revenue increased 10%, but this was offset by an 11% decline in North America.
The net revenue result was in line with the company’s guidance of mid-single digit revenue decline, which was announced in June.
Gross profit was $895 million on a reported basis and $949 million on an adjusted basis. The gross profit margin increased 130 basis points over last year driven by favorable sales mix shifts and lower product costs.
The first quarter operating loss was $31 million on a reported basis, and the operating income was $128 million on an adjusted basis. The company also reported a net loss of $22 million on a reported basis and a net income of $90 million on an adjusted basis.
Ralph Lauren himself stated, “I am encouraged by the steps we are taking to refocus on and evolve our core and bring back the entrepreneurial spirit that made this company great,” which agrees with the company’s decision to maintain its full fiscal year outlook.
“We have made good initial progress in the execution of our Way Forward Plan,” said Stefan Larsson, President and Chief Executive Officer. “We will continue to balance driving near-term performance with the pursuit of our long-term vision. We have already completed the planned right-sizing of the organization and are well underway in building the leadership team that will have the strength to successfully execute the plan.”
Ralph Lauren ended the first quarter Fiscal 2017 with 485 directly operated stores, comprised of 132 Ralph Laurenstores, 81 Club Monaco stores and 272 Polo factory stores.
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