NEW YORK – Polo Ralph Lauren Corp. (RL) said Tuesday quarterly profit quadrupled on strong sales of spring and summer merchandise, beating Wall Street expectations, and it raised its full-year earnings forecast.
Polo's shares jumped more than 5 percent on the news to a record high.
The company said earnings rose to $50.7 million, or 48 cents per share, in the fiscal first quarter ended July 2, from $12.7 million, or 12 cents per share, in the year-ago period.
Wall Street analysts on average forecast earnings of 37 cents per share. Polo, which sells clothing and accessories to department stores and operates its own specialty stores, said key profit drivers included expansion of those specialty stores as well as international development, luxury accessories and new merchandise.
Wholesale sales rose 41 percent to $337 million, while licensing revenues ticked up slightly to $57 million. Retail sales climbed 15 percent from last year to $357 million, and sales at the company's stores open at least a year rose 7.3 percent.
The company said it now expects full-year earnings of $2.85 to $2.92 per share, up from its previous forecast for $2.75 to $2.85 per share. Analysts, on average, expected a full-year profit of $2.93 per share, according to Reuters Estimates.
Revenue for the full year is expected to rise in the high single-digits, with high single-digit growth in the wholesale business, a percentage gain in the low teens in the retail business, and licensing royalty flat to last year, Polo said.
Tempering the company's performance will be costs related to its recent purchase of the business that formerly licensed the Polo brand for footwear.
The company said on the call that it is investing significantly in its Chaps brand and plans to launch a line for women and children next spring, and that it will make a push into the Asian markets.
Polo's shares rose $2.62, or 5.2 percent, to $52.76. Earlier in the day it climbed as high as $53.23, the highest level since going public in 1997.
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