Ralph Lauren (RL) beat the Street Thursday morning with a 35% increase in fiscal fourth-quarter profits, but the apparel maker’s revenue barely nudged and its full-year guidance failed to meet expectations.
Shares of the New York-based company retreated more than 3% in premarket trading on the weaker-than-expected sales and below-consensus outlook.
The company said it earned $127 million, or $1.37 a share, last quarter, compared with a profit of $94 million, or 99 cents a share, a year earlier.
Excluding one-time items, Ralph Lauren said it earned $1.41 a share, well above consensus calls from analysts for $1.30.
Net revenue inched up 1% to $1.6 billion, trailing the Street’s view of $1.7 billion. Same-store sales increased by a more robust 3%.
“Enhanced profit flow-through was achieved despite sustained macroeconomic challenges and strategic decisions that mitigated revenue growth during the year,” Roger Farah, president and chief operating officer of Ralph Lauren, said in a statement.
Looking ahead, Ralph Lauren forecast fiscal 2014 revenue growth of 4% to 7%, implying sales of $7.13 billion to $7.34 billion. Even the high end of that new range would trail the Street’s view of $7.63 billion.
Operating margins are expected to contract 0.25 to 0.75 percentage points from the year before. In the current quarter, Ralph Lauren sees net revenues rising by a low-single-digit percentage.
Ralph Lauren saw its shares drop 3.22% to $182 in premarket trading Thursday morning, setting them up to trim their 25% rally so far this year.