Premium US fashion house Polo Ralph Lauren is to focus its international expansion on Europe after the company reported a 7% sales growth for its fourth quarter.
Posting its results for the three months to April 2, the business, which operates the Polo and Ralph Lauren brands, said sales increased 7% to $1.4bn (£860m). However net income declined 35.8 percent to $73.2m (£44.9m)
Wholesale sales rose 2% to $752m (£462m) in the fourth quarter and retail sales rose 14% to $631m (£387m). Gross profit for the fourth quarter increased 3% to $810m (£497m) yet net income declined 35.8% due to “calendar shifts” distorting the comparison.
For the year to April 2 sales increased 14% to $5.7bn (£3.5bn). Wholesale revenues were $2.8bn (£1.7bn), 10% greater than the year before. Retail sales rose by 19% to $2.7bn (£1.7bn) in the year
Gross profit increased 14% to $3.3bn (£2.0bn) and operating income rose 20% to $845m (£519m).
Roger Farah, president and chief operating officer, said: “Our full year results were much better than we expected, reflecting the incredible momentum of the Ralph Lauren brand around the world. Strong underlying trends continued in the fourth quarter, although several calendar shifts distort comparability with the prior year period.”
Farah said the company would put $1bn (£613m) into capital expenditures over the next three years with 70% of this focused on growing Ralph Lauren store base particularly in Europe and in concessions in China and Hong Kong.
It was reported earlier this year that the company is understood to have signed up to open a store for its vintage-inspired menswear brand RRL on Mount Street in London’s Mayfair.
In October last year Ralph Lauren announced that it would open its first Rugby store in the UK at 43 Kings Street, Covent Garden in autumn this year on a 10-year lease. The Rugby sub-brand, which launched in 2004, and has a younger, more “campus” feel than the Ralph Lauren mainline.
The fashion house also launched a UK version of its website in October last year.