Ralph Lauren Corporation reported earnings per diluted share of ($0.27) on a reported basis and $1.06 on an adjusted basis for Q1 2017.
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This is excluding restructuring, impairment and inventory-related charges in connection with the company’s restructuring plans, for the first quarter of Fiscal 2017.
This compared to earnings per diluted share of $0.73 on a reported basis and $1.09 on an adjusted basis, excluding restructuring and other related charges, for the first quarter of Fiscal 2016.
For the first quarter of Fiscal 2017, net revenues of $1.6 billion declined 4% compared to the prior year period on both a constant currency and a reported basis.
The decline in reported net revenues was in line with the guidance provided in June of a mid-single digit revenue decline. On a reported basis, international net revenue rose 10% in the first quarter, offset by an 11% decline in North America.
In the first quarter of Fiscal 2017, wholesale segment revenue decreased 5% on both a reported and constant currency basis to $607 million, driven by a decline in North America as the U.S. department store channel continued to experience challenging traffic trends, partially offset by an increase in Europe.
Retail segment revenue decreased 3% on both a reported and constant currency basis to $907 million in the first quarter, driven by a comparable store sales decline that was partially offset by non-comparable store sales growth.
Consolidated comparable store sales decreased 6% on a reported basis and 7% in constant currency during the first quarter, primarily due to lower traffic trends.
Licensing segment revenue of $38 million in the first quarter decreased 8% on both a reported and constant currency basis.
Gross profit for the first quarter of Fiscal 2017 was $895 million on a reported basis, including $54 million in non-cash inventory-related charges.
On an adjusted basis, gross profit was $949 million and gross profit margin was 61.1%, 130 basis points above last year, excluding non-cash inventory related charges from both periods.
This increase was primarily driven by favorable sales mix shifts, lower product costs and an improvement in Asia driven by initiatives to improve quality of sale metrics.
Operating expenses in the first quarter of Fiscal 2017 were $926 million on a reported basis, including $105 million in restructuring and other related charges.
On an adjusted basis, operating expenses were $821 million and operating expense rate was 52.9%, 180 basis points above last year, excluding restructuring and other related charges from both periods.
This increase was due to deleverage of fixed expenses on lower net revenues. Adjusted operating expenses were $828 million in the prior year period.
Operating loss in the first quarter of Fiscal 2017 was $31 million on a reported basis, including restructuring and other related charges of $159 million.
On an adjusted basis, operating income was $128 million and operating margin was 8.2%, 60 basis points below last year, excluding restructuring and other related charges from both periods.
This was better than the guidance provided of a 110-160 basis point decline, driven by a more favorable impact of the company’s inventory management initiatives and product mix. The lower operating margin year-over-year was attributable to fixed expense deleverage on lower net revenues, partially offset by higher gross margin.
Wholesale operating income in the first quarter of Fiscal 2017 was $133 million on a reported basis, including $11 million in restructuring and other related charges.
On an adjusted basis, wholesale operating income in the first quarter was $144 million and wholesale operating margin was 23.7%, up 190 basis points compared to last year.
Retail operating income in the first quarter of Fiscal 2017 was $63 million on a reported basis, including $62 million in restructuring and other related charges.
On an adjusted basis, retail operating income was $125 million and retail operating margin was 13.8%, up 120 basis points compared to last year. ■