Ralph Lauren Q2 Adj. Profit Beats View, Affirms Full-year Revenue Outlook

(RTTNews) - Apparel maker Ralph Lauren Corp. (RL) reported a decline in profit for the second quarter from last year, reflecting lower revenues and operating margins that were impacted by one-time charges and foreign currency effects.

However, adjusted earnings per share for the quarter beat analysts' expectations. The company also reaffirmed its revenue growth forecast for the full-year 2016.

Looking ahead to the third quarter, Ralph Lauren expects consolidated net revenues to be up 0 to 2 percent on a reported basis. Based on current exchange rates, foreign currency will have an approximate 250 basis point negative impact on revenue growth.

Ralph Lauren maintained its fiscal 2016 outlook. The company expects consolidated net revenues for the year to be approximately flat on a reported basis and increase by 3 to 5 percent in constant currency. Operating margin for the year is still expected to be 180 to 230 basis points below the prior year's level due to negative foreign currency effects.

The Street is currently looking for third-quarter revenues to edge up 0.4 percent to $2.04 billion and full-year 2016 revenues to decline 0.3 percent to $7.60 billion.

The New York-based fashion company, whose brands include Polo, American Living, Chaps and Club Monaco, reported second-quarter net income of $160 million or $1.86 per share, down from $201 million or $2.25 per share in the prior-year quarter.

Excluding restructuring and non-cash charges associated with its global brand reorganization, adjusted net income for the latest quarter was $184 million or $2.13 per share.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $1.74 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter declined 1 percent to $1.92 billion from $1.95 billion in the same quarter last year. Wall Street analysts' had a consensus revenue estimate of $1.95 billion.

The decline reflects lower wholesale and retail net sales, and also includes about 500 basis points of negative impact from foreign currency effects. However, net sales rose 4 percent in constant currency, driven by double-digit Growth Internationally.

Consolidated comparable store sales decreased 1 percent on a constant currency basis during the second quarter and also declined 6 percent on a reported basis.