Ralph Lauren (RL), the New York-based clothing and accessory maker, finished dead last among S&P 500 members Thursday, dropping after slashing sales forecasts.
CFO Christopher Peterson pointed to lower customer traffic at stores and currency pressures as the primary drivers for the disappointing sales revisions, on a quarterly earnings call with analysts Thursday.
Ralph Lauren now expects slow growth as it begins clearing bigger end-of-season inventories than expected, and is preparing for the spring season with a variety of new rollouts, according to Peterson.
"As a result, we expect reported revenues to be flat to down 2% on a reported basis due to continued pressure from lower foreign tourist traffic as well as higher allowances in the U.S. wholesale channel to move excess inventory," he said on the call. "For the full-year, fiscal 2016 period, revenues are expected to decline approximately 3% on a reported basis with 400 basis points of negative impact from currency. This compares to our prior outlook of flat revenues on a reported basis and 400 basis points of foreign exchange impact."
Quarterly sales of $1.9 billion also missed Wall Street targets by more than 4%, based on Bloomberg consensus data, while non-adjusted earnings per share of $1.54 fell short by about 27%. Ratings cuts also accompanied the news, such as a downgrade to neutral at Credit Suisse (CS).
Department store operator Kohl's (KSS) was not far behind in the index, finishing the day as second-worst with a 19% drop when the Menomonee Falls, Wis.-based company issued an earnings preview that revealed "very volatile" sales numbers that clocked in far below analyst expectations. Kohl's is set to release its full quarterly earnings report to investors on Feb. 25.
Meanwhile, the big winner on the day was miner Freeport-McMoRan (FCX), which led the pack of natural resource companies riding the wave of rallying commodities. It also topped the S&P with an 18% gain Thursday.
Copper prices in particular helped boost the Phoenix-based company, which increased more than 1% to about $212 a pound on the day, based on Bloomberg data.