The worst may have been seen in many of the US apparel makers.  At least that is what Polo Ralph Lauren Corporation (NYSE: RL) is trying to communicate on its own operations.

The company posted earnings this morning of $104 million or $1.00 EPS, up from $73 million and $0.68 EPS in the same quarter in 2007.  This was on a revenue rise of 20% to $1.24 Billion for the quarter.  First Call had estimates of $0.65 EPS on $1.15 Billion in revenues. 

It may be hard to compare these numbers directly to estimates because these numbers are inclusive of lower tax rates at 28%, down from 39% last year.  Operating expenses were up 21% in the quarter.  For its fiscal year, the numbers came in at $420 million in net income and $3.99 EPS.

As far as guidance is concerned, Ralph Lauren sees revenues growing at low to mid-single digit rates, along with operating margins heading down by 300 to 400 basis points (3% to 4%). 

For fiscal 2009, the company sees revenues growing at low to mid-single digit rates, and the company’s target of $3.95 to $4.05 EPS remains.  If we take the $4.88 Billion in 2008 revenues and imply a 2% to 5% growth target we get $4.97 to $5.12 Billion in projected revenues.  First Call has next year’s estimates pegged at $3.97 EPS and $5.08 Billion in revenues.

Ralph Lauren shares closed at $61.75 yesterday and are indicated up about $3.00 with more than one hour to the open.  Its 52-week trading range is $50.55 to $102.58.

Jon C. Ogg
May 28, 2008

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