(Reuters) – Ralph Lauren (NYSE:) on Thursday forecast annual revenue growth below market expectations and named expert Justin Picicci as its chief financial officer, effective immediately.
Shares of the clothing maker, which have risen about 16% so far this year, fell 4.5% in premarket trading after the company also forecast current quarter revenue growth below estimates.
Demand for more expensive clothing in the United States has been hectic as consumers become increasingly demanding about the quality, style and value of their discretionary budgets.
Ralph Lauren, like its peers in the apparel industry, turned to promotions in markets like the United States to appeal to a more price-sensitive, low-income consumer.
The company expects annual revenue to rise in the single digits, focusing on around 2% to 3%, missing market expectations of a 3.98% increase to $6.89 billion, according to LSEG data.
Ralph Lauren's wholesale business has come under pressure in the United States as retailers and department stores limit orders while facing the brunt of weak demand from a cautious consumer.
Wholesale revenue in Ralph Lauren's largest market, North America, fell 2% in the quarter after a 15% drop in the previous quarter.
“We continue to evaluate our brand presence door-to-door, resulting in approximately 20 department store exits completed in the (North America) region this fiscal year,” the company said.
It also forecast first-quarter revenue to rise slightly, versus expectations for a 2.82% rise to $1.54 billion.
However, the company's fourth-quarter revenue of $1.57 billion beat estimates of $1.56 billion, benefiting from strong demand in its direct-to-consumer channel in Europe and Asia.
Picicci, who most recently served as Ralph Lauren's corporate finance director, succeeds Jane Nielsen. Nielsen joined the company as chief financial officer in 2016 and also took on the role of chief operating officer in 2019. She will remain chief operating officer of the clothing manufacturer.
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