Polo Ralph Lauren Corporation today reported net income of $111 million, or $1.03 per diluted share, for the third quarter of Fiscal 2007, compared to net income of $91 million, or $0.84 per diluted share, for the third quarter of Fiscal 2006, an approximate 22 per cent increase in net income and a 23 per cent increase in earnings per share.
Net revenues for the third quarter increased 15 per cent to $1.14 billion, compared to $996 million in the third quarter last year. Excluding the impact of the Polo Jeans acquisition, net revenues increased 10 per cent. Operating income increased 28 per cent to $184 million, compared to $144 million last year. Operating income as a percent of revenue improved 170 basis points to 16.1 per cent, from 14.4 per cent last year, reflecting both expanded gross profit rates and expense leverage.
Net revenues for the first nine months increased 18 per cent to $3.26 billion, compared to $2.77 billion last year. Excluding the impact of the Polo Jeans and footwear acquisitions, net revenues increased 12 per cent. Operating income for the first nine months increased 33 per cent to $533 million, compared to $401 million in the same period last year. Operating income as a percent of revenue improved 190 basis points to 16.3 per cent, from 14.4 per cent in the same period last year. For the first nine months of Fiscal 2007, net income was $328 million, or $3.04 per diluted share, compared to net income of $246 million, or $2.30 per diluted share for the comparable period last year, a 33 per cent increase in net income and a 32 per cent increase in earnings per share.
“I am exhilarated by the continued success of our company and the positive responses to our overall strategy and direction. We feel there is a clear path of growth for the future. Our focus on the world of luxury gives us endless opportunities to develop further movement in the men’s, women’s, children’s, and home categories. We are constantly creating and refining new lines – Rugby, Lauren, childrenswear – all of which are doing well and growing rapidly,” said Ralph Lauren, Chairman and Chief Executive Officer.
Mr. Lauren added, “The response to our new group, Global Brand Concepts, has been favorable and has tremendous possibilities. With our first client announced, and with work underway, the potential for this business is monumental.”
“Our strategy to elevate the product and to refine our distribution channels continues to produce strong results. Our performance year-to-date is outstanding, as we delivered an 18% sales growth with a 33% increase in operating income while continuing to support growth initiatives for the future in luxury accessories, specialty retail, and denim,” said Roger Farah, President and Chief Operating Officer.
“The range of our accomplishments has been dramatic. Throughout the quarter and first nine months we continued to develop new products, elevate the merchandising and presentation of our luxury brands, open new retail stores, and expand our brand internationally. All are in line with our long-term strategy, and we have accomplished this with very high returns on our investments,” Mr. Farah added.
