Ralph Lauren Corporation reported net income of $95 million, or $1.09 per diluted share, for the first quarter of Fiscal 2016, which excludes restructuring and non-cash charges associated with its global brand reorganization.
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This compared to net income of $162 million, or $1.80 per diluted share, for the first quarter of Fiscal 2015. On a reported basis, net income was $64 million or $0.73 per diluted share in the first quarter.
The company also announced significant progress on the transition to the new global brand management organizational structure.
Net revenues for the first quarter of Fiscal 2016 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.
The decline in reported net revenues included approximately 500 basis points of negative impact from foreign currency effects.
Wholesale Sales. In the first quarter of Fiscal 2016, wholesale segment sales declined 6% on a constant currency basis. Wholesale revenue in the first quarter was negatively impacted by our customers’ receipt plans due to an earlier Easter this year which was partially offset by double-digit constant currency growth in Europe.
Combining 4Q15 and 1Q16, which is more reflective of the Spring/Summer season, global wholesale revenues were up approximately 2% in constant currency. Reported wholesale segment sales declined 9% to $642 million.
Retail sales increased 3% on a constant currency basis in the first quarter over the prior year period, driven by contribution from new stores and e-commerce expansion. Reported retail sales declined 3% compared to the first quarter of Fiscal 2015 to $935 million, negatively impacted by foreign currency movements.
Consolidated comparable store sales decreased 2% on a constant currency basis during the first quarter and declined 8% on a reported basis.
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. Operating expense rate of 51.1% increased 430 basis points compared with the first quarter of Fiscal 2015, due to the timing of revenue receipts and incremental investments in infrastructure.
As reported, operating expenses in the first quarter of Fiscal 2016 were $870 million, which included $42 million in restructuring and non-cash charges associated with our global brand reorganization.
Excluding restructuring and related non-cash charges, operating income was $141 million in the first quarter of Fiscal 2016. Operating margin of 8.8% was 550 basis points below the prior year period, which was better than the outlook provided in May due to disciplined operational management. The lower operating margin was attributable to fixed expense deleverage, incremental investments in infrastructure and negative foreign currency effects.
Excluding non-cash charges associated with our global brand reorganization, wholesale operating income was $140 million in the first quarter of Fiscal 2016 compared with $180 million in the prior year period. Wholesale operating margin decreased 370 basis points to 21.8% due to a change in customer receipt plans related to the earlier Easter this year.
Excluding non-cash charges associated with our global brand reorganization, retail operating income was $118 million in the first quarter of Fiscal 2016 compared with $168 million in the prior year period. Retail operating margin declined 490 basis points to 12.6%, due to fixed expense deleverage and negative foreign currency effects.
Licensing operating income of $36 million in the first quarter of Fiscal 2016 was in line with the prior year period.
Excluding restructuring and related non-cash charges, net income for the first quarter of Fiscal 2016 was $95 million, or $1.09 per diluted share. This compared to net income of $162 million, or $1.80 per diluted share, for the first quarter of Fiscal 2015. On a reported basis, net income was $64 million or $0.73 per diluted share in the first quarter.
The company had an effective tax rate of approximately 30%, excluding restructuring and related non-cash charges, in the first quarter of Fiscal 2016, which compared to an effective tax rate of 31% in the first quarter of Fiscal 2015. On a reported basis, the effective tax rate was 29% in the first quarter. ■