Ralph Lauren has reported a revenue of $1.821 billion (€1.674 billion) in the second quarter, closed on 1st October. This is equivalent to a 7.6% shortfall compared to the same period last year. International revenue grew 2%, while that of North America fell by 12%.
The group has however recorded a marked downturn in operating income, which was recorded at $76 million, for an operating margin of 4.2%. A year ago, operating income was $230 million, equivalent to an 11.7% margin. Specifically, wholesale operating income fell from $247 to $203, and that for retail from $123 down to $19 million. Licenses contributed for $44 million, compared to $42 million last year. The group indicated that it has allocated $150 million for reorganisation activities. Yet, even taking this into account, the margins are slumping. In the course of the quarter, the group also provided other clues, such as the discontinuation of the Denim & Supply brand.
For the entire 2016-17 fiscal year, Ralph Lauren is forecasting revenue to decrease by a little less than 10%, and operating margin, excluding the restructuring costs, to reach approximately 10%.