NEW YORK — Ralph Lauren Corp. reported that sales declined in the fiscal third quarter as it cut down on shipments and offered fewer discounters.
Like many high-end retailers, Ralph Lauren is trying to overhaul its business as affluent shoppers are shifting many of their purchases online, where there’s an abundance of luxury goods at lower prices.
Ralph Lauren is trying to speed up the process of making and delivering clothes to stores, while it lowered inventory by 16 percent compared with a year ago. Ralph Lauren is also testing customization, offering create-it-yourself crewnecks in its Manhattan store as customization gains popularity with shoppers.
Ralph Lauren on Thursday reported a fiscal third-quarter loss of $81.8 million, or $1 per share, after reporting a profit in the same period a year earlier. Earnings, adjusted for pretax expenses and non-recurring costs, came to $2.03 per share.
The results topped Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $1.87 per share.
The upscale clothing company posted revenue of $1.64 billion in the period ended Dec.30, down from $1.71 billion in the year-earlier period.
In North America, total revenue decreased 11 percent, while revenue in Europe increased 8 percent and rose 7 percent in Asia. It attributed the decline in North America to lower sales in both the retail and wholesale channels, fueled by reduced shipments and discounts. Sales at stores opened at least a year in North America were down 10 percent, including a 3 percent decline in physical stores and a 27 percent decline in e-commerce.
Neil Saunders, managing director of GlobalData Retail, said that while Ralph Lauren is making some inroads, it still has a long way to go to turn around the business.
“Ralph Lauren has not regained all of the ground it lost over the past 10 years and is a long way from where a luxury brand of its kind should be,” Saunders wrote in a research report Thursday. “The main brand issues are still clarity and relevance. Many consumers are unclear about what Ralph Lauren stands for or what it has to offer.”
In morning trading, shares were down $3.76, or 3.3 percent, to $110.55. Ralph Lauren shares have risen 10 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen roughly 6 percent. The stock has risen 29 percent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on RL at https://www.zacks.com/ap/RL