Strong dollar cramping Ralph Lauren's style
Ralph Lauren, the apparel company known for preppy fashions and high-end style, fell as much as 13pc in early trading yesterday after cutting its annual forecast.
Revenue will only be up about 1pc this year, excluding the effects of currency moves, the New York-based company said in a statement. It had previously predicted growth of 3pc to 5pc.
The outlook shows the challenges facing the company's new chief executive, Stefan Larsson, a former Gap executive who succeeded founder Ralph Lauren last November.
Traffic has been sluggish at malls and department stores, and the strong US dollar is eroding the company's foreign revenue. The shares fell as low as $100.75 in pre-market trading yesterday. That follows a 40pc decline in 2015, a year when apparel companies were battered by investors.
Ralph Lauren is in the middle of a reorganisation effort that will cut $110m in annual costs by the end of fiscal 2017.
As part of the changes, the company is reducing product count to keep inventory low.
"While our recent results have been disappointing, I am greatly encouraged by the changes that are already taking place since the appointment of Stefan Larsson," Ralph Lauren, (76) said in the statement yesterday. (Bloomberg)