E-commerce leads Ralph Lauren’s Q4 retail sales gain

May 13, 2016 03:47 PM

Ralph Lauren Media says e-commerce, up in a mid-single-digit percentage globally, drove retail sales higher in its fiscal fourth quarter.

The retailer, No. 53 in the Internet Retailer 2016 Top 500 Guide, doesn’t disclose its online sales. Internet Retailer estimates Ralph Lauren sold $890.0 million online sales in 2015, according to data.

Retail sales in fiscal Q4 ended April 2 increased 5.6% to $889 million from $842 million. The increase stemmed from e-commerce growth, new store expansion and a 53rd week of sales, the company said. On a constant-currency basis, retail sales increased 7%, the company said. Wholesale sales declined more than 6% in Q4, dragging down total revenue for the quarter.

For the fiscal 2016 year, retail sales dipped 0.8% to $3.93 billion from $3.96 billion. Retail sales for the year rose 4% on a constant-currency basis, the company said. Wholesale revenue fell more than 5% for the 12-month period.

In fiscal 2017 Ralph Lauren will move to a new e-commerce platform. “The new platform will not only improve the functionality of our site, but will allow us to improve how we engage with our customers digitally and across our retail channels,” said CEO Stefan Larsson, whom founder Ralph Lauren promoted to the top job in September 2015. “We believe this will dramatically improve the customers' experience on mobile devices.”

In addition to its two e-commerce sites in the U.S., the retailer operates eight sites internationally.

Ralph Lauren has been offering promotions to increase sales, hoping to counteract discounts at department stores and off-price retailers, says Chen Grazutis, a retail analyst with Bloomberg Intelligence. That strategy, along with the stronger dollar, has put pressure on its profit margins.

“To reverse the deteriorating trend in margins, management may need to make some tough decisions going forward,” Grazutis said.

Ralph Lauren can no longer try to be all things to all people, Grazutis tells Internet Retailer. “In a retail market like we have today, with all the department stores taking such hits, (Ralph Lauren) really has to stand for something to bring people into the stores. They need to focus. Trying to cater to everyone is what got them off track in the first place. That might hurt sales in the short term, but once a focused effort results in higher-quality sales, that’s when a turnaround can actually work.”

For fiscal Q4 ended April 2, the retailer also reported:

  • Net revenue of $1.87 billion, down 1.1% from $1.89 billion in the same quarter a year ago.
  • Retail sales of $889 million, up 5.6% from $842 million.
  • Wholesale sales of $942 million, down 6.7% from $1.01 billion.
  • Net income of $41 million, a 67.6% I GET 67.0% decline from $124 million. On an adjusted basis net income was $74 million.

For fiscal 2016 ended April 2, Ralph Lauren reported:

  • Net revenue of $7.40 billion, down 2.9% from $7.62 billion in fiscal 2015.
  • Retail sales of $3.93 billion, down 0.8% from $3.96 billion
  • Wholesale sales of $3.30 billion, down 5.7% from $3.50 billion
  • Net income of $396 million, down 43.6% from $702 million.
  • The retailer had 493 stores: 144 Ralph Lauren stores, 77 Club Monaco stores and 272 Polo factory stores. 



Top Solution Providers