Ralph Lauren reportes better-than-expected first quarter results

The American higher-end apparel company on Wednesday reported net income of $95 million for the first quarter of fiscal 2016 compared to net income of $162 million, or the first quarter of 2015. On a reported basis, net income was $64 million. The company also announced significant progress on the transition to the new global brand management organizational structure.

Net revenues for the first quarter were in line with the prior year period on a constant currency basis, driven by double-digit growth internationally, contribution from new stores and global e-commerce expansion. Reported net revenues declined 5% to $1.6 billion in the first quarter.

Wholesale segment sales declined 6% on a constant currency basis while retail sales increased 3% on a constant currency basis, driven by contribution from new stores and e-commerce expansion.

Licensing revenues of $41 million in the first quarter were 6% above the prior year period in constant currency and grew 3% on a reported basis, reflecting higher royalties from increased sales of Ralph Lauren, Polo and Lauren products worldwide.

Gross profit for the first quarter of Fiscal 2016 was $969 million and gross profit margin was 59.8%, excluding restructuring-related non-cash charges of $3 million. Gross profit margin was 120 basis points lower than the prior year period, reflecting unfavorable foreign currency effects.

Excluding restructuring and related non-cash charges, operating expenses were $828 million in the first quarter of Fiscal 2016, 4% above the prior year period. 

In the 90 days since the announcement of a new global brand management organizational structure, Ralph Lauren established six global brand groups and filled the global brand president roles, as well as the key regional and channel positions. The company is on track to achieve $100 million in annual expense savings associated with the restructure