Ralph Lauren Corp (NYSE:RL) announced its financial results for the first quarter of fiscal 2017. Even though the company reported a loss in the latest quarter, the better-than-expected adjusted earnings per share and revenues pushed up stock prices in premarket trading, which increased 6.7% to $101.44 per share.
According to the statement, net revenue of Ralph Lauren was $1.55 billion, decreasing 4.1% compared to the same period last year. This results were basically in line with Ralph Lauren’s own forecast in June of a mid to high single digit decline in revenue, and above the analyst’s estimate of $1.53 billion. In addition, sale decreased 6% in the first quarter if newly opened and closed stores are not considered, and dropped 7% excluding currency influence. The international sales rose 10% in the period ended July 2, however, the sales in North America dropped 11%, which weakened the international sales.
Ralph Lauren reported net loss of $22 million, or $0.27 per diluted share in the first quarter, decreased from a profit of $64 million, or $0.73 per share the same period last year. Adjusted earnings per share was $1.06 per share, slightly below the $1.09 per share in the first quarter of fiscal 2016.
The reported loss of Ralph Lauren was partly due to the expenses generated by the company’s restructuring plan. In June, Chief Executive Stefan Larsson, who took the leadership of Ralph Lauren in November and previously worked at GAP and H&M, came up with the restructuring plan to refocus on the luxury apparel and accessories on the core Ralph Lauren brand.
“I am encouraged by the steps we are taking to refocus on and evolve our core and bring back the entrepreneurial spirit that made this Company great,” Ralph Lauren, the Executive Chairman and Chief Creative Officer, said in the statement. “The team has my full support as we start to execute the Way Forward Plan.”
Shares of Ralph Lauren rose 10.88% to $105.41 per share in midday trading Wednesday.
“We have made good initial progress in the execution of our Way Forward Plan,” Stefan Larsson, the President and Chief Executive Officer of Ralph Lauren, said in the statement. “We will continue to balance driving near-term performance with the pursuit of our long-term vision. We have already completed the planned right-sizing of the organization and are well underway in building the leadership team that will have the strength to successfully execute the plan.”