Ralph Lauren sees strong Q1Thursday, 07 August 2008
For the three months ended June 28, net income rose to $95.2 million, or 93 cents a diluted share, beating the consensus estimate of 72 cents from Yahoo Finance. That compares with $88.3 million, or 82 cents, in the year-ago quarter. The company said the growth was from a higher gross margin rate and a lower tax rate.
On a conference call with analysts, Roger Farah, president and chief operating officer, said, “Our first quarter reflects the successful benefits of our long-term strategic initiatives — primarily our commitment to new merchandise development and product innovation, our ongoing attempts to expand our direct-to-consumer and our growing international presence. This multipronged strategy is designed to diversify our businesses, reduce our exposure to any one region of the world or channel of distribution and to give us more direct control over our brands.”
“Our inventories are very well managed, as they are below last year, and at the same time, our retail sell-through rates have been strong and our profit margins have benefited as a result,” he said. “Our cash flows have grown with more direct control [that] we now have over our businesses, and we have made the right decisions in order to deliver a very strong balance sheet with large growing cash balances and very little debt. Our entire management team has supported and delivered on these key short-term operating priorities. Because of this cross-functional discipline, we are comfortable pursuing our long-term initiatives.”
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