Ralph Lauren Corp (RL.N) topped quarterly profit and revenue estimates as the luxury apparel maker benefited from a focus on offering fewer discounts and cost cutting, sending its shares up over 5 percent on Tuesday.The New York-based fashion company, like peers Tapestry Inc (TPR.N) and Calvin Klein-owner PVH Corp (PVH.N), has pulled heavily discounted products from department store shelves to regain its premium brand status.
Ralph Lauren, known for its signature Polo shirts and classic tweed blazers, is also investing in its core brands, cutting jobs, reducing excess inventory and shutting underperforming stores, while pushing its supply chain to bring the latest fashion to stores faster.The company boosted spending on marketing by about 20 percent mainly for its Spring Polo campaign that features its iconic white Polo shirt, helping the men’s Polo shirts category grow double digits percentage in the quarter.
Ralph Lauren also tweaked its revenue forecast for fiscal 2019. It now expects revenue to be down slightly, compared with a low-single digit decline it forecast earlier.
“Improvements in the business, as well as the raised guidance help increase investor confidence in long-term growth,” said RBC Capital analyst Brian Tunick.
Ralph Lauren’s shares rose as much as 8.8 percent to an over three-year high of $147.79, before paring gains. They have gained over 30 percent this year.