Polo Ralph Lauren Easily Tops Fiscal First Quarter Earnings Expectations

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Last Update: 10-Aug-11 11:28 ET

Polo Ralph Lauren (RL $124.21 +4.36) reported first quarter earnings results of $1.90 per share, $0.44 better than the Capital IQ Consensus Estimate of $1.46.

Revenues rose 33.4% year/year to $1.49 billion versus the $1.43 billion consensus.

In the second quarter of Fiscal 2012, the Company expects consolidated revenues to increase at a high-teens-to-low 20% rate. Wholesale revenues are expected to grow at a mid-teens rate in the second quarter and retail sales are projected to increase by a mid 20% rate. The Company expects the operating margin from continuing operations for the second quarter of Fiscal 2012 to be approximately 300 basis points below that in the comparable prior year period, primarily due to cost of goods inflation and incremental expenses related to continued investment in strategic growth initiatives.

Due to the stronger-than-expected first quarter performance, the Company now expects consolidated revenues for Fiscal 2012 to increase at a mid-to-high teens rate, which compares to a prior expectation of mid-teens growth. The Company has also raised its operating margin outlook for Fiscal 2012. The full year operating margin from continuing operations is now estimated to be down 50-100 basis points from the prior year period, which compares to a prior expectation of a 100-150 basis point decline and reflects the anticipated impact of cost of goods inflation and increased investment in strategic growth initiatives. The full year Fiscal 2012 tax rate continues to be estimated at 33%.