Polo Ralph Lauren and Burberry Group plc registered strong increases in profits while two U.S. specialty store retailers with different demographic focal points, Chico’s FAS and American Eagle Outfitters, saw their first-quarter earnings erode.
Polo early Wednesday said that its fourth-quarter earnings, buoyed by recent acquisitions and a lower tax rate, surged 41.4 percent, reaching $103.5 million, or $1 a diluted share, from $73.2 million, or 68 cents, in last year’s quarter.
Burberry reported that, in the year ended March 31, net income was up 22.6 percent to 135.2 million pounds, or $271.4 million at average exchange, from 110.2 million pounds, or $221.2 million, in the prior year.
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However, Chico’s and American Eagle reported sharply lower profits, with the former plummeting 73 percent and the latter recording a 44.3 percent contraction in first-quarter net income.
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At Polo, quarterly sales spiked 21.6 percent to $1.19 billion from $975.1 million.
For the full year, earnings rose 4.7 percent to $419.8 million, or $3.99 a diluted share, from $400.9 million, or $3.73 a share, in the prior year. Sales swelled 15.1 percent to $4.67 billion from $4.06 billion.
The company reaffirmed its guidance for fiscal 2009 for earnings in the range of $3.95 to $4.05 a share.
At Burberry, sales for the year rose 17 percent to 995.4 million pounds, or $1.99 billion, from 850.3 million pounds, or $1.7 billion.
Angela Ahrendts, chief executive officer of Burberry, said the results “demonstrate the robustness of our global luxury business in these challenging times, with consistent performance across our regions, channels and products.”
The London-based company’s bottom line benefited from a 15.1 million pound, or $30.3 million, profit from the sale of its Haymarket headquarters in advance of a relocation planned for late this year. Burberry partly attributed its profit gain to the growth in sales of its luxury handbags and shoes, with non-apparel sales shooting up 37.3 percent in the year to 289.7 million pounds, or $581 million. Women’s wear, meanwhile, grew 13 percent to 345.2 million pounds, or $692 million.
Chico’s and American Eagle didn’t fare nearly as well, however.
Chico’s said first-quarter net income in the three months ended May 3, hurt by increases in expenses and large reductions in comparable-store sales, fell to $12.7 million, or 7 cents a diluted share, from $47.2 million, or 27 cents, in the year-ago quarter. Results included a pretax charge of $2.2 million related to the closure of seven Soma stores.
Sales dropped 9.6 percent to $409.6 million from $453.1 million, while comps sank 17.5 percent, off 22 percent at Chico’s stores and 10 percent at White House|Black Market.
The company expects to continue to post same-store sales declines and lower earnings for the first half of the year.
At American Eagle, higher markdowns and lower-than-expected sales dropped net income to $43.9 million, or 21 cents a diluted share, from $78.8 million, or 35 cents, in the year-ago period.
Sales for the quarter grew 4.6 percent to $640.3 million from $612.4 million but were down 6 percent on a same-store basis.
The company expects second-quarter earnings of 28 cents to 30 cents a diluted share, down from 37 cents in the year-ago quarter.
For more, see Thursday’s issue of WWD.