High-end apparel retailer Ralph Lauren reported “better than expected” first quarter 2014 results this week, according to a press release. Net income was $181 million for the first quarter compared to $193 million for first quarter fiscal 2013.
Retail sales rose 3% to $879 million from $857 million in the first quarter last year, reflecting the incremental contribution from new store locations and strong ecommerce operations growth worldwide that was partially offset by the net negative impact of foreign currency translation.
“Despite an uneven global operating environment, we planned the business prudently and achieved sales and profit levels that exceeded our expectations, even as we make important investments in our long-term growth objectives and in the infrastructure to support them,” said Roger Farah, president and chief operating officer for Ralph Lauren in the press release.
Gross profit for the first quarter of fiscal 2014 increased 1% to $1 billion. Gross profit margin of 60.7% was 160 basis points below the prior year period, due to the integration of the Chaps men’s sportswear operations and unfavorable foreign currency dynamics.
Operating income for the first quarter of fiscal 2014 was $276 million, 5% below the prior year. Operating margin was 16.7% of sales.
Retail operating income of $160 million was 11% below the prior year period. Retail operating margin declined 270 basis points of 18.2%, this was a result of a negative foreign currency effects, costs associated with the company’s global store, ecommerce development efforts and geographic mix.