Ralph Lauren Corp. today posted a net loss for its fourth quarter, but its overall results were better than market watchers had expected.
The company — which announced Wednesday that former Procter & Gamble veteran Patrice Louvet would take the reins as its new president and CEO in July — said its net loss for the period was $204 million, or $2.48 per diluted share, compared with earnings of $41 million, or 49 cents per diluted share, in the same period last year. But adjusted earnings per diluted share, at 89 cents, were better than analysts’ bets for adjusted diluted EPS of 78 cents.
Reported revenue decreased 16 percent, to $1.6 billion, which was in line with market watchers’ forecasts.
“The retail landscape today is more dynamic than ever, but within this environment, our brand continues to be one of the most recognized and beloved all over the world,” Ralph Lauren, executive chairman and chief creative officer, said in a release. “Our performance for the year reflects our work to strengthen our brand, and I am confident that the actions we are taking, combined with our strong heritage, position us well to succeed.”
Ralph Lauren’s founder added that he is “very excited to partner with” Louvet. For the first time — in November 2015 — Lauren handed over the CEO reins of his company to former Old Navy executive Stefan Larsson. But creative differences led to an abrupt departure, announced in February 2017. (Larsson’s actual departure came on May 1.)
During his brief tenure, Larsson implemented a “Way Forward” strategy that the company said it would continue to carry out following his exit.
Ralph Lauren CFO Jane Nielson said the company has made important strides in the most recent fiscal year.
“We created operational efficiencies, increased the productivity of our assortment and improved quality of our sales,” Nielson said. “In the fourth quarter, we continued to drive quality of sales up by moderating discount levels; lowered our inventory levels by 30 percent to improve inventory turns; reduced the number of SKUs by 20 percent for both Spring and Fall 2017 … optimized our store fleet by closing another 20 underperforming stores … [and] initiated the move to a more cost-effective, flexible e-commerce platform.” (The company made headlines this year when it announced its plans to shutter its flagship store on New York’s Fifth Avenue.)
For the full year, revenue decreased 10 percent, to $6.7 billion. On a reported basis, net loss was $99 million, or $1.20 per share. On an adjusted basis, net income was $477 million, or $5.71 per diluted share. This compared with net income of $396 million, or $4.62 per diluted share on a reported basis, and $546 million, or $6.36 per diluted share, for fiscal 2016.
For fiscal 2018, net revenue is expected to decrease 8 to 9 percent, excluding the impact of foreign currency. For the current quarter, the company expects net revenue to be down low double-digits, excluding the impact of foreign currency.
As of 2:15 p.m., Ralph Lauren shares were down 1.4 percent, to $71.70.