The US fashion group Ralph Lauren Corporation had to accept a significant drop in profits in the second quarter of the 2022/23 financial year. However, sales increased sharply, mainly due to good business in Asia. CEO Patrice Louvet was generally satisfied with the figures published on Thursday: The company had achieved “solid” results and exceeded its own expectations in terms of sales and profits, he said in a statement.
For the three months ended October 1, consolidated revenue was $1.58 billion, an increase of 5.0 percent over the same quarter last year. Adjusted for exchange rate changes, sales even grew by 13.0 percent.
Sales in Asia developed particularly dynamically. There, Ralph Lauren achieved an increase of 17.2 percent (currency-adjusted +32.9 percent) to 316.4 million US dollars. In North America, the company was able to increase sales by 3.3 percent (currency-adjusted 3.5 percent) to EUR 726.6 million. In Europe, reported sales of USD 493.5 million fell just short of the previous year’s level (-0.4 percent), but grew by 15.0 percent after adjusting for currency effects.
Higher production and freight costs, changes in dates for marketing expenses and negative currency and special effects weighed on the result. As a result, operating income fell 17.9 percent from the prior-year quarter to $206.7 million. Net income fell 22.1 percent to $150.5 million.
In the entire first half of the year, the group was able to achieve sales of 3.07 billion US dollars, surpassing the corresponding prior-year level by 6.7 percent. Net income, on the other hand, fell 23.5 percent to $273.9 million.
Given the numbers, management confirmed its full-year revenue guidance of currency-neutral growth of a “high single-digit percentage.” At the same time, however, it warned that the negative impact of the strong US dollar on reported results over the course of the year is likely to be greater than previously assumed.