Fashion label Ralph Lauren’s first quarter was a very good one, as it beat both analysts’ turnover and profit forecasts. It is quite a turnaround for a company that suffered a huge loss only a year ago.
Ralph Lauren’s first quarter turnover reached 1.35 billion dollars (1.15 billion euro), down 13.2 %, but slightly higher than analysts’ expectations. The company’s new strategy resulted in a lower turnover, because it shut down onerous stores and discarded weaker brands. It also has a better stock management and offers fewer discounts.
This is a way to compete with companies like Amazon and the fast fashion chains. However, it still suffered a 7 % like-for-like retail turnover drop, but this was also better than what analysts had expected at 7.5 %.
The company’s profit is a clear sign the current strategy is paying off. Ralph Lauren managed to turn around a 22.3 million dollar (18.9 million euro) net loss from last year into a 59.5 million dollar (50.5 million euro) profit in the first quarter of this fiscal year.
In May, Ralph Lauren appointed Patrice Louvet as its new CEO, succeeding Stefan Larsson who suddenly left the company in February after a dispute with founder and chairman Ralph Lauren. The first results under Louvet’s management are definitely positive news.