Ralph Lauren Corp. (NYSE:RL) stock was up 2.94% in late morning trading on January 18. The stock has climbed 5.1% in 2018 and 22% year over year. Ralph Lauren is a New York-based retailer that offers a number of product categories including apparel, fragrances, accessories, and products for the home.
Like other fashion retailers, Ralph Lauren has faced challenges in the rapidly changing modern retail environment. There were more retail bankruptcies in 2017 than 2016, including Sports Authority and Payless. In early 2017, Ralph Lauren announced the closure of its flagship Polo store on Fifth Avenue. Ralph Lauren stock has declined 35% over a five-year period.
The company released its fiscal 2018 second quarter results on November 2. Total revenue decreased 9% in the quarter to $1.7 billion. North American revenue led the decline as it fell 16% due to lower sales in retail and wholesale channels, as well as a strategic drop in shipments and promotional activity. European revenue rose 4% while Asia revenue was mostly flat.
Adjusted net income was $164 million or $1.99 per diluted share in comparison to $158 million or $1.90 per diluted share in the prior fiscal year. Ralph Lauren also announced a quarterly dividend of $0.50 per share representing a 1.8% dividend yield.
Ralph Lauren has projected net revenue to drop between 8% and 9% in fiscal 2018. The company expects a 6% to 8% decline in the third quarter of fiscal 2018.
The stock is a risky long-term hold as the U.S. stock market continues to roar to record highs in the aftermath of the tax reform package. However, a spike in holiday retail sales could result in higher-than-expected earnings.
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