Recent events in the stock market may have turned investors apprehensive. But even as the larger markets suffer, Ralph Lauren appears to have come up trumps. Even on 10 August, the luxury clothing brand managed a rise of 5 percent on shares. Over the last quarter too, Ralph Lauren has proved particularly successful; that too, despite the rise in fuel and cotton costs that have cut into the gross margins of most clothing brands.
Despite the 120 basis points drop in gross margins, Ralph Lauren has managed high profit growth. Diluted earnings per share went up 57 percent even as the luxury brand clocked a 32 percent increase in revenue. In Ralph Lauren stores, sales grew by 19 percent. This is a clear indication that customers are once again trading up when it comes to the luxury industry. Full-priced Ralph Lauren is scoring over the likes of Nordstrom.
Another company that did quite well over the last quarter was Macy’s. The department store chain may not have managed a brilliant revenue growth, but sales grew by 7 percent over the last quarter. That is definitely good news for the brand, more so when you consider that same store sales rose to 4 percent to 4.5 percent over the latter half of the year.
The news is a boost for Macy’s especially as fears abound regarding a second economic recession. The Macy’s management also helped push rates up from $2.40-$2.45 to $2.60-$2.65 per share. Many analysts feel that Macy’s recent success is due to its focus on diverse regional product fare.
Via: Seeking Alpha