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Aug 8 (Reuters) - Ralph Lauren Corp reported better-than-expected quarterly profit and sales as the luxury apparel maker kept a tight leash on discounting and inventory, sending its shares up 5 percent in premarket trading.
Ralph Lauren, like other U.S. apparel chains, has been struggling with weak sales due to sluggish spending on clothing and accessories and fierce competition from Amazon.com and fast-fashion retailers.
In a bid to turn its business around, the company has been pulling back inventory from wholesale partners, reducing sales in the off-price channel, engaging in fewer promotional periods, shuttering stores and exiting underperforming brands.
Ralph Lauren's adjusted gross margins rose 210 basis points to 63.2 percent in the first quarter ended July 1, helped by a double-digit decline in costs.
The company also lowered its inventory levels by 31 percent from a year earlier.
The company's net income was $59.5 million, or 72 cents per share, in the first quarter ended July 1, compared with a loss of $22.3 million, or 27 cents per share, a year earlier.
Excluding items, the company earned $1.11 per share, while sales fell 13.2 percent to $1.35 billion in the quarter.
Analysts on average were expecting adjusted earnings of 94 cents per share and revenue of $1.34 billion, according to Thomson Reuters I/B/E/S.
Ralph Lauren hired P&G executive Patrice Louvet as its chief executive in May, replacing Stefan Larsson, who stepped down following creative differences with the founder.
Same-store sales fell 7 percent in the quarter, better than the 7.5 percent drop expected by analysts polled by research firm Consensus Metrix. (Reporting by Gayathree Ganesan in Bengaluru; Editing by Anil D'Silva)