Ralph Lauren's forecast for revenue surge falls short on pandemic uncertainty

(Reuters) – Ralph Lauren Corp forecast on Thursday full-year revenue growth that fell short of analysts’ estimates, citing store closures and uncertainty around the coronavirus pandemic as several countries struggle with a new wave of infections.

Shares of the high-end apparel retailer tumbled about 6% before the bell, after North America quarterly sales fell more than expected.

A spike in infections have forced many governments to put their economies back into lockdown, severely constraining a major market for high-fashion labels and reining in the momentum seen in digital sales across geographies.

Ralph Lauren said it expected first-quarter revenue to rise about 140% to 150%, compared to a dip last year when several stores were shut, but warned of a hit from lockdowns and curbs across several key markets, notably in Europe and Japan.

For fiscal 2022, it expects revenue to increase about 20% to 25% on a constant currency basis. Analysts were expecting a 31.1% rise, according to Refinitiv IBES data.

The retailer’s forecast comes as the global luxury industry is making a quicker-than-expected comeback from the pandemic lows, fueled by speedy vaccinations.

“The environment remains volatile,” Ralph Lauren executives said in a statement.

Its European rivals, including Louis Vuitton-owner LVMH, Hermes and Kering’s Gucci, last month unveiled strong demand for high-end fashion and handbags.

Ralph Lauren’s net revenue rose about 1% to $1.29 billion in the fourth quarter and beat expectations of $1.21 billion.

Sales in North America fell 10% to $569 million, compared with estimates of $599.4 million, largely due to disruptions in its wholesale business.

Quarterly loss narrowed, the company said. On an adjusted basis, Ralph Lauren earned 38 cents per share, while analysts were expecting a loss of 73 cents.

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