Ralph Lauren (NYSE: RL) foresees a bigger revenue loss than expected during its fourth quarter amid the continuous lockdowns it faces in Europe and Japan.
Several European governments initiated lockdown at the end of 2020 amid a rise in COVID-19 cases. The action ultimately crushed holiday sales for global luxury retailers that would typically thrive during the shopping season.
The American fashion company anticipates fourth-quarter fiscal 2021 revenue plummeting mid-to-high single digits compared to analysts expected 2.9% drop, as stated by IBES data from Refinitiv.
“Our current outlook could be negatively impacted if government-mandated lockdowns or restrictions are extended,” the company said.
Nevertheless, the company has strived to stay strong throughout the pandemic with an increase in its digital presence and a rise in prices. Furthermore, it is reducing its store and corporate office profile.
According to chief executive officer Patrice Louvet, the company’s real estate restructuring is the most important part in surviving the pandemic and coming out stronger.
“We’re making good sequential progress,” Louvet said in an interview. He went on to mention that Ralph Lauren had been focused on its objectives, including branding amid collaborations and online work to function at its best capacity.
“Despite the disruptions and uncertainty we faced throughout our third quarter, our teams continued to elevate our brands and effectively engage with consumers around the world – delivering better than expected gross and operating margins through the holiday period, and continuing to meaningfully improve our digital profitability,” Louvet said in a statement. “We remain focused on emerging from this period in a position of strength as we invest in key areas like our digital transformation, while taking a disciplined approach with expenses and ensuring we have the right resources, footprint and brand portfolio to support future growth and value creation.”
Net revenue dropped 18.2% to USD1.43 Billion, below the anticipated 1.47 Billion.
Shares fell 2% at market open.