Ralph Lauren Corp. first-quarter earnings drop 6,2%, with single digit growth expectations

Ralph Lauren Inc. reports fiscal-first-quarter earnings fell 6.2% on weaker margins despite an increase in sales, however, the company re-affirmed its full-year revenue outlook but showed caution for the short term.

CEO Roger Farah said: “We expect that our more recent investments in new stores, e-commerce operations and international expansion will contribute to accelerated sales and profit momentum in the second half of the year.” For the quarter ended June 29, Ralph Lauren reported a profit of $181 million, down from $193 million last year.

As of June 29, inventories were up 17% from a year earlier at $1.05 billion. Wholesale sales rose 5.9% to $735 million, though the company said a planned reduction in shipments to certain European customers and the transition of certain Japanese wholesale distribution to directly operated concession shops kept the growth in check.

Ralph Lauren is still absent from major emerging markets such as India and in other large emerging markets such as Russia and Ukraine maintains franchising / wholesale operations. Ralph Lauren is due to open its first flagship store in Kiev, Ukraine’s capital first quarter 2014, under a franchise agreement with a local company.

Ralph Lauren store, Shanghai