Shares of Ralph Lauren Corp. (NYSE: RL) rose nearly 11 percent to $87 in Tuesday morning trading after the company reported 2017 first quarter earnings that surpassed estimates.
Under new CEO Patrice Louvet, the corporation said that it will pull back inventory from 20 to 25 percent department stores and offer fewer discounts in the second half of the year, according to Reuters. Inventory levels fell by 31 percent in the first quarter ended July 1, Ralph Lauren said in a statement.
"It simply isn't credible for a high-end brand to simultaneously showcase itself in a glitzy store on Madison Avenue, while at the same time hawking a random assortment of sweaters thrown in a ragtag way on a table in Macy's," said Neil Saunders, managing director of research firm GlobalData Retail.
Net income totaled $59.5 million, or 72 cents per share, after a loss of $22.3 million, or 27 cents per share, for the same period last year. Adjusted EPS was $1.11, beating the 95-cent FactSet consensus. Revenue totaled $1.35 billion, down from $1.55 billion and just ahead of the $1.34 billion FactSet consensus.
CEO Louvet, who took over the top job in May, is looking to build on the initiatives put in place by his predecessor Stefan Larsson. "We are looking at these 3 buckets: Our own sites, our wholesale.com and pure plays," Louvet said on a post-earnings call, adding that the company is actively looking to partner with the right online pure-play retailers.