Polo Ralph Lauren Corp. topped third-quarter profit expectations and began to turn its focus to Asia, an effort that will dilute earnings in the current quarter, but could help solidify the company’s position in a key growth region.
Net income for the quarter ended Dec. 26 rose 5.5 percent to $111.1 million, or $1.10 a diluted share, from $105.3 million, or $1.05, a year earlier. Revenues dipped 0.6 percent to $1.24 billion from $1.25 billion.
Profits came in 9 cents ahead of the $1.01 a share Wall Street had penciled in, but revenues were below the expected $1.26 billion.
“Having assumed direct control of our operations in key Asian markets on Jan. 1, we are now focused on driving growth in this dynamic region, particularly as we expand distribution and introduce new product categories,” said Roger Farah, president and chief operating officer. “While we are cautious regarding global consumer spending trends, we remain committed to our strategic investments in broadening our international presence and expanding our direct to consumer reach.”
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For the most part, the firm will report results from the Asian operations in its retail segment beginning this quarter. This is expected to dilute the firm’s earnings per share by 8 cents to 10 cents in the fourth quarter.
Polo also said 2010 revenues would be down by a percentage in the low-single digits, instead of the mid-single digit range previously projected.
For complete coverage, see Thursday’s issue of WWD.