Ralph Lauren’s share price shot up on Wednesday despite the luxury fashion group reporting falling turnover and profit.
The firm’s performance was affected by restructuring costs associated with its “Way Forward Plan”.
The US company’s net revenue for the three months to 2 July came in at $1.55bn (£1.19bn), down from $1.62bn in the same period last year.
Ralph Lauren’s gross profit for the period was $895m, down from $966m.
The firm reported a net loss of $0.27 per share, or a net income of $1.06 on an adjusted basis – excluding restructuring, impairment and inventory-related charges.
Ralph Lauren’s share price rose 10 per cent to $104.87, at the time of writing, in the US.
Why it’s interesting
The restructuring costs are in relation to the company’s “Way Forward Plan”, a scheme to “refocus on the core of what has made Ralph Lauren the iconic company it is today and get closer to the consumer than ever before”.
In July, the company said it would do this by evolving its “product, marketing and shopping experience to increase desirability”.
The company’s executive chairman and chief creative office, Ralph Lauren, said he was “encouraged by the steps we are taking to refocus on and evolve our core and bring back the entrepreneurial spirit that made this company great”.
He added: “The team has my full support as we start to execute the Way Forward Plan.”
What the company said
Stefan Larsson, president and chief executive:
We will continue to balance driving near-term performance with the pursuit of our long-term vision. We have already completed the planned right-sizing of the organisation and are well underway in building the leadership team that will have the strength to successfully execute the plan.