Ralph Lauren's 3Q profit up 27 pct

Published on NewsOK Modified: February 6, 2013 at 4:15 pm •  Published: February 6, 2013

During a conference call with investors following the earnings release, Roger Farah, president and chief operating officer, said the company is seeing ongoing weakness in Italy, Spain and southern Europe. That softness was offset by stronger wholesale business in the northern countries including Germany and the United Kingdom, and the Scandinavian market.

Ralph Lauren also aims to capitalize on the increasing shift migration of its shoppers online. Customer traffic to ralphlauren.com from mobile devices rose 35 percent in the third quarter.

"The continued shift in the customer' preference to shop online is undeniable," Farah said.

As a result, the company just bought a distribution center in North Carolina and plans to double its size to more than 800,000 square feet.

The company is also expanding its e-commerce business abroad and began serving online customers in Italy Greece, Spain and Portugal in the third quarter. It now serves customers online in 11 countries throughout Europe.

Ralph Lauren said that as a result of better-than-expected profitability in the first nine months of the year, it now expects operating margin from continuing operations for fiscal 2013 to be about .75 to 1 percent point above the year before. That's above its earlier expectation of a .50 percentage point improvement.

For the fourth quarter, Ralph Lauren said it expects its consolidated net revenue to be up by a mid-single-digit percentage, reflecting an 8 percent to 11 percent increase in retail revenue and flat wholesale revenue. Assuming a 5 percent increase, that would mean revenue would reach $1.7 billion in the fourth quarter. Analysts expect $1.74 billion, according to FactSet.

Shares of Ralph Lauren rose $9.72 to close at $174.63 Wednesday.