NEW YORK (AP) -- Ralph Lauren Corp.'s first-quarter profit fell 6 percent as the luxury retailer faced currency woes and sluggish sales at its stores.
The New York-based seller of Polo and other brands offered a cautious sales outlook. The company's stock tumbled in morning trading..
Ralph Lauren said it earned $181 million, or $1.94 per share, in the three months ended June 29. That compares with $193 million, or $2.03 per share, a year earlier.
Revenue rose 4 percent to $1.61 billion from $1.55 billion.
Analysts were expecting earnings of $1.93 per share on revenue of $1.65 billion.
"Despite an uneven global operating environment, we planned the business prudently and achieved sales and profit levels that exceeded our expectations, even as we make important investments in our long-term growth objectives and in the infrastructure to support them," Roger Farah, Ralph Lauren's president and chief operating officer, said in a statement.
Sales in the company's wholesale division increased 6 percent to $735 million in the first quarter of fiscal 2014. The growth was fueled by continued growth for certain core North American merchandise categories.
A planned reduction in shipments to some European customers and the transition of some Japanese wholesale distribution to directly operated concession shops partially mitigated wholesale revenue growth in the quarter.
The company's move to discontinue the American Living brand, sold at J.C. Penney stores, had dragged down sales last year.
Sales at Ralph Lauren's own retail stores rose 3 percent to $879 from $857 million in the first quarter last year, reflecting the increasing contribution from new stores and strong growth for e-commerce worldwide. That was partially offset by the net negative impact of foreign currency translation. Excluding the impact of discontinued businesses and foreign currency effects, retail sales rose 6 percent from a year ago.
Revenue at stores open at least a year slipped 1 percent on a reported basis and rose 1 percent adjusted for currency exchange shifts. The shift in the timing of Easter is estimated to have reduced the figure by about 2 percentage points in the first quarter.
The company posted an 8 percent drop in licensing revenue of $39 million, as lower Chaps-related revenue offset higher clothing and fragrance royalties for Ralph Lauren products.
Ralph Lauren reiterated it expects 4 percent to 7 percent revenue growth for the full year from last year's $6.94 billion. That means it projects full-year revenue anywhere from $7.22 billion to $7.43 billion.
Analysts expect $7.38 billion, according to Factset.
In the current quarter of fiscal 2014, Ralph Lauren expects to see revenue increase by a low-single digit percentage from last year's $1.86 billion. Analysts expect $1.99 billion in sales for the second quarter, meaning they anticipate a 7 percent increase in the quarter, according to FactSet.
Ralph Lauren ended the first quarter of with 396 directly operated stores, including 123 Ralph Lauren stores, 59 Club Monaco stores and 214 Polo factory stores. The company also operated 505 concession shop locations worldwide at the end of the first quarter. In additional to company-operated locations, international licensing partners operated 69 Ralph Lauren stores and 33 dedicated shops as well as 89 Club Monaco stores and shops at the end of the quarter.
Shares fell more than 6 percent, or $12.67 per share, to $176.84 in morning trading. Shares have been trading anywhere from $142.39 to $192.03 in the past 52 weeks.