Ralph Lauren (NYSE:RL) stock has jumped today, up by 10% as of 12:45 p.m. EDT, after the clothing specialist reported better-than-expected fiscal first-quarter earnings.
The company posted revenue of $1.35 billion, down from $1.55 billion a year ago but slightly ahead of analyst expectations. Adjusted earnings per share came in at $1.11, easily beating the $0.96 per share in adjusted profit that the Street was modeling for.
The company has been reducing discounts in an effort to bolster profitability, which helped gross margin by 210 basis points. Inventories also fell by 31% as Ralph Lauren improved inventory turnover and efficiency.
Comparable-store sales in North America fell 8% on a constant currency basis, driven by a 22% decline in e-commerce as well as a 4% decline in brick-and-mortar store revenue. Comps in Europe also fell 8%, while comps in Asia increased by 2%.
"While we are addressing challenges in our business, we have significant opportunity ahead and we're moving forward with urgency," said CEO Patrice Louvet. "Ralph and I are focused on actively evolving the brand expression and consumer experience so we can ultimately renew growth and get back to leading. We are continuing to build a strong foundation for future growth, as evidenced by our progress this quarter on the key elements of the Way Forward plan."
Fiscal second-quarter sales are expected to decline 9% to 10%. Ralph Lauren reaffirmed its full-year guidance, which forecasts net revenue to fall 8% to 9%, with an operating margin of 9% to 10.5%.