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$RL announced several key actions as part of the continued execution of its Way Forward Plan to return it to sustainable, profitable growth and continue to move business and iconic brand forward. $RL will move to a more cost-effective, flexible e-commerce platform through a new collaboration with Salesforce's Commerce Cloud (formerly Demandware).
$RL said Alice Delahunt will join the company in the newly created role of Chief Digital Officer, reporting directly to Patrice Louvet, CEO, beginning in April. Laura Porco has been appointed SVP, E-Commerce for Ralph Lauren North America. Valeria Juarez will assume the role of SVP, E-Commerce, International.
For FY18, $RL expects net revenue to decrease 8-9%, excluding the impact of FX. Operating margin is expected to be 9-10.5%, excluding FX, and Capex is expected to be approx. $300MM in FY18. In 2Q18, $RL expects net revenue to be down 9-10% and operating margin to be up 40-60BP, excluding foreign currency impacts.
$RL reported a net income of $60MM or $0.72 per share in 1Q18 compared to a net loss of $22MM or $0.27 per share in 1Q17. Adjusted net income was $91MM or $1.11 per share in 1Q18. Revenue fell by 13% to $1.3Bil, driven by distribution and brand exits, a strategic reduction in shipments and promotional activity, as well as lower consumer demand.
$RL sees inventory in 1H18 declining about in the 20% range. The company also expects mid to high single digit global retail sales and comp decline in FY18. Wholesale is expected to decline in the mid teens globally, while e-commerce is expected to decline in the mid teens for FY18.
$RL said it closed 40 underperforming doors in its retail fleet and is on track to close 20-25% of its US wholesale points of distribution by 2H18. In FY18 the company is forecasting a mid teens decline in global e-commerce comps with lower discount rate and higher GM and continued growth with its digital partners.
$RL, which named Patrice Louvet as the new President and CEO on May 17, lowered its inventory levels by 30% and closed 20 stores in 4Q17. Wholesale revenue in the quarter slid 17% to $777MM, while Retail revenue fell 16% to $745MM. Licensing revenue rose 7% to $43MM. Total Ralph Lauren comparable store sales fell 12% in the quarter.
Following the recent exit of former CEO Stefan Larsson, $RL posted a revenue slump of 16% to $1.6Bil for 4Q17 in a market of changing trends. The slide in revenue pushed the half-century-old fashion empire to a net loss of $204.0MM from last year's net income of $41.3MM. On a diluted basis, the loss was $2.48 a share vs. a profit of $0.49.
$RL appointed Patrice Louvet as President and CEO. His appointment will become effective July 17, 2017, at which time he will also be appointed to its BoD. Louvet will dual report to Ralph Lauren in his capacity as Executive Chairman of the Board and to its BoD. Louvet most recently served as Group President, Global Beauty at $PG.