Ralph Lauren Corp.’s stock is popping in Thursday morning trading on the heels of a better-than-expected earnings report.
As of 9:30 a.m. ET, shares for the luxury fashion house were up 11% to $111.
The company beat second-quarter earnings estimates of $2.39 per share with adjusted earnings of $2.55 per share on profits of $198 million. Sales climbed 1% to $1.7 billion, compared with forecasts of $1.69 billion, thanks to a respective 3% and 4% growth in Europe and Asia, respectively.
However, “business disruptions” in Hong Kong led to a 27% decline in sales there. For months, the territory has been plagued with protests that have led to store closures and a dip in tourism that have disrupted retail.
Revenues in North America also decreased 1% to $881 million, while wholesale noted a 6% decline. However, Ralph Lauren saw a 2% gain in same-store sales, with a 2% comp increase in brick-and-mortar stores and a 2% rise through its e-commerce platform.
“Our progress was driven by a continued focus on brand elevation and creating immersive lifestyle experiences that are amplified across our stores and digital marketing and commerce channels around the world, while also maintaining expense discipline,” said President and CEO Patrice Louvet.
Ralph Lauren also saw a 2% improvement in its direct-to-consumer network this quarter, and it expanded into new platforms, including resale and subscription models.
The brand pointed to the success of its runway show during New York Fashion Week in September, the highly anticipated Ralph Lauren x Friends 25th anniversary collection and its Wimbledon and US Open tennis partnerships.
“Our global teams are elevating our iconic brand across every market and channel,” said Executive Chairman and Chief Creative Officer Ralph Lauren. “From our stores to our digital flagships and the way we are connecting on social media, the authentic expression of the Ralph Lauren lifestyle is showing up in relevant ways all over the world.”
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