Ralph Lauren Q4 Profit Down; Board Authorizes Addl $500 Mln Stock Repurchase

(RTTNews) - Ralph Lauren Corp. (RL) reported that its net income for the fourth quarter of fiscal 2015 was $124 million or $1.41 per share, down from $153 million or $1.68 per share in the fourth quarter of fiscal 2014.

Excluding foreign currency impacts, earnings per share for the latest-quarter was $1.69 in the fourth quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $1.32 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the fourth quarter of Fiscal 2015 increased approximately 7% on a constant currency basis, driven by wholesale segment growth and double-digit e-commerce expansion across all regions. Reported net revenues increased 1% to $1.9 billion in the fourth quarter. Wall Street expected revenues of $1.88 billion.

Retail sales rose 6% on a constant currency basis in the fourth quarter over the prior year period, supported by double-digit expansion in global e-commerce and the contribution from new store openings. Reported retail sales were in line with the fourth quarter of Fiscal 2014 at $841 million. Consolidated comparable store sales increased 1% on a constant currency basis during the fourth quarter and declined 4% on a reported basis.

The Company's Board authorized an additional $500 million stock repurchase program permitting the Company to purchase shares of Class A Common Stock, subject to market conditions. This amount is in addition to the $80 million available at the end of the fourth quarter of Fiscal 2015 as part of a previously authorized stock repurchase program, bringing the Company's total current authorization to $580 million.

In the first quarter of Fiscal 2016, the Company expects consolidated net revenues to be flat in constant currency, as retail segment growth is offset by a decline in wholesale revenue which is impacted by itscustomers' receipt plans due to an earlier Easter this year. Based on current exchange rates, foreign currency will have an approximate 600 basis point negative impact on revenue growth in the first quarter of Fiscal 2016.

The Company currently expects consolidated net revenues for Fiscal 2016 to increase by mid-single digits in constant currency. Based on current exchange rates, foreign currency will have an approximate 450 basis point negative impact on Fiscal 2016 revenue growth. Operating margin for Fiscal 2016 is currently expected to be 180-230 basis points below the prior year's level due to negative foreign currency effects. The full year Fiscal 2016 tax rate is estimated at 30%. Capital expenditures are planned at approximately $400 million -$500 million in Fiscal 2016.

This guidance excludes restructuring and other one-time related charges associated with our global brand reorganization. We expect these charges to be approximately $70-100 million over the course of Fiscal 2016.