Ralph Lauren Corp beat market expectations for the holiday-quarter profit on Tuesday, as higher prices for its winterwear boosted margins, sending the fashion house’s shares up 6 percent in premarket trading.
The company has said it could sell products at higher prices due to a ramp-up in marketing, especially on social media through supermodels and actors, which has helped lift its brand image.
The company saw continued momentum in both core and underdeveloped categories, led by performance in the fleece and outerwear programs during the holidays.
North America revenue increased slightly to $911 million. In retail, comparable-store sales in North America were up 4 percent, driven by rises of 4 percent at brick-and-mortar stores and 6 percent at ralphlauren.com.
Europe revenue increased 3 percent to $438 million, while Asia revenue in the third quarter increased 5 percent to $290 million.
Ralph Lauren said it expects fiscal 2020 revenue, excluding fluctuations in foreign exchange, to rise 2 percent to 3 percent. This does not include any potential impact from the outbreak of a new coronavirus in China.
The company’s net income rose nearly three-fold to $334.1 million, or $4.41 per share, lifted by a one-time tax benefit.
“Creating style that endures and inspires our consumers guides everything we do,” said Ralph Lauren, executive chairman and chief creative officer. “I am encouraged by how our global teams continue to deliver on this mission as we elevate our iconic brand all over the world.”
“We continue to make strong progress on our ‘Next Great Chapter’ plan amid a volatile backdrop, with third-quarter results ahead of our overall expectations, including better than expected revenues, operating margin, and double-digit EPS growth,” added Patrice Louvet, president and chief executive officer. “Over the important holiday season, our teams consistently executed across each of our strategic priorities, enabling us to elevate our brand and deliver for our consumers across every touch point.”