Ralph Lauren Corp. has posted wider-than-expected losses as the coronavirus pandemic continues to weigh on its business.
The New York-based company logged a fourth-quarter net loss of $50.5 million, or a loss of 68 cents a share on an adjusted basis, while analysts forecasted earnings of $0.01. Revenues for the three-month period ended March 28 dropped 15% to $1.27 billion, compared with consensus bets of $1.29 billion.
Despite the disappointing financial results, Ralph Lauren noted “strong continued momentum” in China, where COVID-19 originated late last year and forced its stores across the mainland to temporarily shut down. It reported full-year sales up double-digits in China, counting declines in the fourth quarter due to the global health crisis. What’s more, the fashion group has seen an “encouraging recent path to recovery” in the Chinese mainland as well as in Korea.
In North America, where store reopenings are assessed on a location-by-location basis, the company has opened back up nearly half of its locations. In Europe, roughly two-thirds of its outposts are back in business.
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“As we manage for the near- and long-term, we remain committed to consistently delivering sustainable growth and value creation for all of our stakeholders,” president and CEO Patrice Louvet said in a statement. “We are confident in our ability to do this thanks to the strength of our business, our balance sheet and our brands — and especially the resilience and commitment of our diverse global teams.”
During the fiscal year, Ralph Lauren made $506.2 million in profits, or adjusted earnings of $6.56 a share, while revenues fell 2% to $6.15 billion. The results, it explained, included the impact of the COVID-19 outbreak and business disruptions stemming from the Hong Kong protests.
At the end of the year, the company had $2.1 billion in cash and investments. Among the steps it has taken to preserve liquidity were drawing down $475 million from its revolving credit facility, halting any incremental share repurchases and suspending its quarterly cash dividend. It has also implemented salary reductions for members of its C-suite and board of directors. (Part of the compensation reductions will be directed to Ralph Lauren’s Employee Relief Fund, which provides grants to workers facing coronavirus-related financial and other hardships.)