Changes at Ralph Lauren come at cost investors are OK with

FILE - In this Friday, Feb. 12, 2016, file photo, the Polo Ralph Lauren Fall 2016 collection is presented during Fashion Week in New York. Ralph Lauren reports financial results Wednesday, Aug. 10. (AP Photo/Richard Drew, File)
FILE - In this Sept. 29, 2015 file photo, designer Ralph Lauren, right, poses in his office with Stefan Larsson in New York. Ralph Lauren swung to a first-quarter loss after the company spent heavily to turn itself around, but the damage was not as bad as many had expected and its shares were the biggest gainers Wednesday, Aug. 10, 2016 on the Standard & Poor’s 500. Just months after taking over as CEO for founder Ralph Lauren late last year, Larsson initiated significant changes. (AP Photo/Jason DeCrow)

NEW YORK — Ralph Lauren swung to a first-quarter loss as it spends heavily to turn itself around, but the damage was not as bad as many had expected and its shares rose faster than any other Wednesday on the Standard & Poor's 500.

Just months after taking over as CEO for founder Ralph Lauren late last year, Stefan Larsson initiated significant changes. He is the first person other than Lauren to hold the title.

In addition to slashing costs to right the company's balance sheet, Larsson tightened its focus on the brands that made Ralph Lauren known worldwide.

While the company is shutting 10 percent of its stores, it is pushing the core brand aggressively, which has been prominent at some very high-profile events.

"One of those proud moments was our presence at Wimbledon earlier this summer and another was the Olympic ceremony this last Friday," Larsson said in a conference call Wednesday. "Where we could see team U.S.A. walking to the stage and demonstrating the strength of American iconic style."

The blazer worn by U.S. flag bearer Michael Phelps, who won his 20th and 21st gold medals in rapid succession Tuesday, was lit up with electroluminescent panels spelling U-S-A across his back.

The jacket made a huge splash.

Changes at Ralph Lauren, however, have come at a cost.

The New York company lost $22 million, or 27 cents per share, after reporting a profit in the same period a year earlier. Earnings, adjusted for restructuring costs, were $1.06 per share.

Yet that was far better than the per-share earnings of 89 cents that Wall Street had been expecting, according to the analysts surveyed by Zacks Investment Research.

Revenue fell 4 percent to $1.55 billion, but that too edged out expectations.

The company also stuck by earlier revenue guidance and shares bolted 8.5 percent higher to $103.14. Still the stock is down 7.5 percent in the year to date.

The company expects fiscal 2017 restructuring charges of up to $400 million, along with an inventory charge of up to $150 million.

_____

Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on RL at http://www.zacks.com/ap/RL

_____

Keywords: Ralph Lauren, Earnings Report

People also read these

Legal group issues private emails Clinton did not...

Aug 9, 2016

The State Department has turned over 44 previously-unreleased Hillary Clinton email exchanges that...

Delta struggles through third day of computer...

Aug 10, 2016

Delta Air Lines had more than 300 cancellations globally before operations return to normal later...

Changes at Ralph Lauren come at cost investors...

Aug 10, 2016

Ralph Lauren swung to a quarterly loss after the company spent heavily to turn itself around, but...

Some Delta systems haven't recovered fully from...

Aug 9, 2016

Delta says some computer systems are still running slowly more than a day after big outage

Colbert to air live after Trump-Clinton...

Aug 10, 2016

Stephen Colbert, who capitalized on the political conventions with live broadcasts, will do the...

About Us

The World Insiders brings you exclusive coverage from across the globe in a timely, easy to consume format sourced directly from our regional media partners.

Contact us: sales[at]theworldinsiders.com

Subscribe Now!