Clothing & Shoes

Ralph Lauren sees Q3 revenues drop 18%

Europe revenue in the third quarter decreased 28% to $316m (£230m) on a reported basis and decreased 32% in constant currency

Ralph Lauren has announced that in its third quarter ended 26 December 2020, revenues decreased by 18% to $1.4bn (£1.02bn) attributed to the impact of Covid-19 and government restrictions on trade.

Europe revenue in the third quarter decreased 28% to $316m (£230m) on a reported basis and decreased 32% in constant currency.

In retail, comparable store sales in Europe were down 38%, with a 51% decrease in brick and mortar stores, which was “partly offset” by a 68% increase in digital commerce. Europe wholesale revenue decreased 17% on a reported basis and fell by 22% in constant currency.

Gross profit for the third quarter dropped to $930m (£678m), down from $1.08bn (£788m) the previous year, with gross margin recorded at 64.9%. Operating income for the recorded period declined by 19.5% to $170m (£124m) from the prior year.

Ralph Lauren, executive chairman and chief creative officer, said: “For more than 50 years we have stayed true to a set of values that define us – among them timelessness, quality, perseverance and optimism. And in this period of great challenge and change, it is these values that are enabling us to authentically and deeply connect with our consumers around the world.”

Patrice Louvet, president and CEO, Ralph Lauren, added that despite the disruptions and uncertainty throughout the third quarter, the teams “continued to elevate” the brands and “effectively engage” with consumers around the world.

She noted that the group delivered “better than expected” gross and operating margins through the holiday period, whilst continuing to “meaningfully improve” digital profitability.

Louvet said: “We remain focused on emerging from this period in a position of strength as we invest in key areas like our digital transformation, while taking a disciplined approach with expenses and ensuring we have the right resources, footprint and brand portfolio to support future growth and value creation.”

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