Ralph Lauren 2Q profit hurt by stronger dollar

Ralph Lauren 2nd-quarter net income slips but results still beat expectations, shares rise

Associated Press

NEW YORK (AP) -- Ralph Lauren's fiscal second-quarter net income fell 4 percent, hurt by the stronger dollar and higher expenses, but results beat expectations and the luxury retailer raised the low end of its revenue outlook for the year.

The company also raised its dividend. Shares rose 4 percent in midday trading.

For the three months that ended on Sept. 28, earnings came to $205 million, or $2.23 per share, from $214 million, or $2.29 per share last year. Analysts expected $2.20 per share, according to FactSet.

Operating expenses rose 6 percent during the quarter as the company invested in new technology platforms and global store expansion.

The stronger dollar, which lessens the value of overseas sales, also weighed on gross margin, the percentage of each dollar in revenue a company actually keeps. The higher expenses were offset by cost cuts and higher revenue.

Revenue rose 3 percent to $1.92 billion, as both sales in the company's shops and website and through other stores rose globally. Analysts expected $1.91 billion.

The company raised its sales guidance for the year to growth of 5 to 7 percent, from prior guidance of 4 to 7 percent growth. That implies revenue of $7.29 billion to $7.43 billion. Analysts expect $7.37 billion.

For the third quarter, which ends in December, the company expects revenue to rise 8 percent to 10 percent, implying revenue of $1.99 billion to $2.03 billion. Analysts expect $2 billion.

Ralph Lauren said it raised its quarterly dividend by 12.5 percent to 45 cents. The next quarterly dividend is payable on Jan. 10 to shareholders of record as of Dec. 27.

Shares rose $6.90, or 4 percent, to $178.09 billion in midday trading. The stock is up 14 percent since the beginning of the year.

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