By Suzanne Kapner
Ralph Lauren Corp. posted higher quarterly profit as the luxury apparel maker pushes through price increases, helping offset some of the rising costs due to tariffs on products imported from China.
The Polo maker has been pulling back on promotions and increasing prices in Asia and Europe. On a conference call Thursday, Chief Executive Patrice Louvet said the company began raising prices slightly at its North American outlet stores in late September, and plans targeted price increases with its wholesale partners and at its own full-line stores starting with its spring 2020 assortments.
Ralph Lauren's shares jumped more than 13% in Thursday trading after the company reported higher-than-expected profit for its fiscal second quarter. Net income was $182.1 million in the three months to Sept. 28, up from $170.3 million a year earlier. The profit growth was driven by higher gross margin and expense control.
Total revenue was $1.71 billion, compared with $1.69 billion a year earlier. North American sales fell 1%, dragged down by a 6% decline in sales to third parties such as department stores.
The company lowered its full-year fiscal guidance slightly, in part due to the protests in Hong Kong. Ralph Lauren stores in the territory were closed for 48 days in the most recent period because of the unrest.
Ralph Lauren executives said they have also mitigated the impact of tariffs by reducing the amount of Chinese goods they import to the U.S. The company's U.S. exposure to China will fall to 22% by the end of this fiscal year, from over 40% two years ago, they said.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com