Ralph Lauren Q4 Results Top Estimates

(RTTNews) - Apparel maker Ralph Lauren Corp. (RL) reported Wednesday a profit for the fourth quarter that declined 19 percent from last year, despite revenue growth, reflecting negative currency impact and lower operating margins.

Both earnings per share and quarterly revenues topped analysts' expectations. The company also provide revenue growth guidance for the first quarter and full-year 2016.

"Our better-than-expected fourth quarter results were achieved in a challenging global macroeconomic environment, showcasing the operational discipline of our teams. While foreign exchange and global consumer spending remain unpredictable, we are taking decisive actions to offset some of these ongoing external pressures" President and Chief Operating Officer Jacki Nemerov said in a statement.

The New York-based fashion company, whose brands include Polo, American Living, Chaps and Club Monaco, reported net income of $124 million or $1.41 per share for the fourth quarter, lower than $153 million or $1.68 per share in the prior-year quarter.

Excluding $0.28 of foreign currency impacts, constant currency earnings for the latest quarter was $1.69 per share. On average, 20 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 quarter grew 1 percent or 6.5 percent in constant currency, to $1.89 billion from $1.87 billion in the same quarter last year, and topped seventeen Wall Street analysts' consensus estimate of $1.88 billion by a whisker.

The company noted that revenue growth was driven by wholesale segment growth and double-digit e-commerce expansion across all regions.

Net sales grew 1.1 percent or 6.7 percent in constant currency, to $1.85 billion from last year. Consolidated comparable-store sales decreased 4 percent or grew 1 percent on a constant currency basis.

Wholesale net sales increased 2.4 percent or 7.6 percent in constant currency, to $1.01 billion, while retail net sales edged down 0.4 percent or grew 5.7 percent in constant currency, to $841 million from the year-ago quarter.

Meanwhile. licensing revenues decreased 5.3 percent or 2.2 percent in constant currency, to $37 million from last year's $39 million.

Operating margin for the quarter contracted 190 basis points to 10.1 percent, primarily due to negative foreign currency effects, and incremental investments.

Gross profit margin was 80 basis points lower, reflecting foreign currency effects and mix shift impacts, and 0perating expense rate increased 110 basis points.

The company's Board of Directors also authorized an additional $500 million stock repurchase program, bringing the company's total current authorization to $580 million.

Looking ahead, the company expects consolidated net revenues for the first quarter to be flat in constant currency, and for the full-year 2016 to grow in the mid-single digits in constant currency. Street is currently looking for first-quarter revenues to edged down 0.3 percent to $1.70 billion and full-year 2015 revenues to grow 2.2 percent to $7.61 billion.

In Wednesday's regular trading session, RL is currently trading at $130.90, down $2.30 or 1.73% on a volume of 0.87 million shares.