Company Also Provides Supplemental Information for Quarterly Fiscal 2005 Results
Polo Ralph Lauren Corporation announced today it is raising its earnings expectation for the first quarter of Fiscal 2006 as a result of operating margins trending ahead of prior guidance. Also, the Company is providing additional information regarding quarterly adjusted earnings per share for Fiscal 2005.
The Company is raising its expectation for the first quarter of Fiscal 2006, ended July 2, 2005, based on significant improvements in business operations made during the quarter. While revenues are expected to increase more than 20%, as previously forecast, the operating margin is now expected to increase between 500 and 550 basis points compared to last year. The Company's previous guidance was that operating margins would almost double last year's 3.7%. The Company intends to address its full year outlook when it reports the first quarter of Fiscal 2006 on August 9, 2005.
“We are pleased that our multi-year business strategy is resulting in better than forecasted performance. Our retail and wholesale businesses are reporting strong revenue gains that were driven by better full-price sell-throughs. In addition, we were able to better leverage our incremental sales through improved expense management,” said Roger Farah, President and Chief Operating Officer. “However, our first quarter is our smallest profit contributor for the year and it would be premature to address full year guidance at this time. We will be in a better position to comment on our full year outlook when we report our first quarter earnings in August.”
In addition, as previously reported, the Company provided adjusted earnings per diluted share for Fiscal 2005 that excluded certain items to give investors an additional tool to evaluate the Company's results. For Fiscal 2005, the company reported full year adjusted diluted earnings per share of $2.47 and communicated that the quarterly adjusted numbers would be provided after the 10-K was filed.
Adjusted earnings per diluted share for the first and second quarters of Fiscal 2005 are unchanged. Adjusted earnings per diluted share have been revised to $0.73 for the third quarter of Fiscal 2005 to exclude a $2 million pre-tax litigation charge, and to $0.84 for the fourth quarter of Fiscal 2005 to exclude a $98 million pre-tax litigation charge and a change to the income tax provision for the quarter. These changes have no effect on reported GAAP results. For a full analysis of the adjustments, please refer to the table reconciliation of GAAP results to adjusted results.
Polo Ralph Lauren Corporation is a leader in the design, marketing and distribution of premium lifestyle products in four categories: apparel, home, accessories and fragrances. For more than 37 years, Polo's reputation and distinctive image have been consistently developed across an expanding number of products, brands and international markets. The Company's brand names, which include “Polo by Ralph Lauren”, “Ralph Lauren Purple Label”, “Ralph Lauren”, “Black Label”, “Blue Label”, “Lauren by Ralph Lauren”, “Polo Jeans Co.”, “RRL”, “RLX”, “Rugby”, “RL Childrenswear”, “Chaps”, and “Club Monaco” among others, constitute one of the world's most widely recognized families of consumer brands. For more information, go to http://investor.polo.com.