Ralph Lauren loses $249M as coronavirus, Hong Kong protests disrupt business
Fourth-quarter sales slumped 15% year-over-year
Ralph Lauren Corp. lost $249 million in the three months through March as the COVID-19 pandemic and protests in Hong Kong slashed sales.
The fourth-quarter loss, excluding restructuring costs and other items, was 68 cents a share, worse than the average loss of 40 cents a share estimated by Wall Street analysts in a Refinitiv survey. The New York-based apparel-maker's sales sank 15 percent to $1.27 billion, better than estimates of $1.22 billion.
For fiscal year 2020, earnings fell 8.76 percent from a year ago to an adjusted $6.56 a share.
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“Reflecting on our performance prior to the crisis, our underlying progress was strong,” CEO Patrice Louvet said in a statement. The company's average price per item "and overall brand elevation journey continued across every region, exceeding our expectations for both the quarter and year," he added.
Sales from all regions slumped, falling 11 percent in North America, 19 percent in Europe and 22 percent in Asia.
To strengthen its balance sheet during the disruptions caused by COVID-19, Ralph Lauren reduced or delayed capital expenditures and inventory commitments and drew down $475 million from its global credit facility.
The company, which also halted share repurchases and suspended its stock-buyback program, had $2.1 billion cash at the end of the quarter.
Ralph Lauren has reopened about half of its stores in North America and two-thirds of its locations in Europe.
The company, which expects first-quarter and full-year results to be significantly affected by COVID-19, suspended all future guidance due to the uncertainty caused by the virus.
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Ralph Lauren shares fell 31 percent this year through Tuesday, lagging the S&P 500's 7.4 percent decline.