Shares of Ralph Lauren Corporation (NYSE:RL), a global leader in the design, marketing, and distribution of luxury lifestyle products in apparel, accessories, home, fragrances, and hospitality, are down more than 7% as of 3:30 p.m. EDT Wednesday after broader markets tumbled and luxury groups reacted to comments from French fashion group LVMH.
Following the downtrends with the S&P 500, Dow, and Nasdaq, more pressure was put on premium retailers when LVMH's chief financial officer, Jean-Jacques Guiony, made remarks to analysts that pointed to a slowdown in China and Japan. Guiony went on to note that the slowdown wasn't massive; however, investors' concern still increased, especially since trade uncertainty remains, and there are reports that Chinese authorities are cracking down on border checks for travelers.
It's fair for Ralph Lauren investors to be concerned about the slowdown and uncertainty in Asia. The company's Asia segment represented roughly 15% of its fiscal 2018 net revenue. As the company continues to grow its overseas business, and as most Ralph Lauren products are produced outside of the U.S., changes in global trade policies and regulations could have a serious impact on the company's operating results in any given quarter.
A slowing Chinese consumer market and trade uncertainties are certainly developments to keep an eye on as Ralph Lauren's Asia segment was the only segment to post positive comparable-store sales growth during fiscal 2018. Investors should tune in for Ralph Lauren's second-quarter fiscal 2019 conference call on November 6, 2018, in hopes for further insight.