The successful launch of the American Living line at JC Penney Co, as well as sustained growth in Europe, have helped Polo Ralph Lauren Corporation to a 42.5% jump in fourth quarter profit.

The luxury goods firm said today (28 May) that its net income soared to $104m, or $1.00 per share, from $73m, or $0.68 per share, in the same period last year.

Quarterly net revenues increased 20% to $1.24bn from $1.03bn last time, helped by the acquisition of former Japanese sub-licensee Impact 21, the remaining interest in Polo Ralph Lauren Japan Corporation, and former US leathergoods licensee New Campaign.

Wholesale sales were up 25% to $786m, with the strong contribution from American Living which launched in February, growth in Europe and Chaps women's wear offset by lower domestic shipments of men's sportswear and Lauren women's wear.

Quarterly retail sales rose 16% to $400m from $346m in the prior year.

Comparable store sales increased 8.9%, reflecting an increase of 5.6% at Ralph Lauren stores, 10.0% at factory stores and 12.5% at Club Monaco stores. sales increased 36%, driven by double-digit gains in all major product categories.

Licensing royalties, however, fell 2% to $55m - although excluding the effect of recent acquisitions they were up by 18% on higher international growth and new product licenses for American Living and Chaps.

Gross profit for the fourth quarter increased 21% to $674m, the company said.

It added that stripping out the effect of recent acquisitions, the gross profit rate was 50 basis points below last year, as increased promotional activity in its domestic businesses offset the benefit of higher European sales.

"I believe the strength of our fourth quarter and full year results is particularly noteworthy since they were achieved even as we made significant investments in long-term initiatives, all in the context of an extremely difficult domestic retail environment," said Roger Farah, president and chief operating officer.

Ralph Lauren, chairman and chief executive officer, added: "I am proud of the progress our company made during the year considering the significant challenges that emerged in the second half."

For the fiscal year, net income grew 4.7% to $420m, or $3.99 per share, from $401m, or $3.73 per share, the year before. Both full year and full year results include a lower effective tax rate, the company said.

Net revenues for the year grew 14% to $4.88bn - an increase of 9% when recent acquisitions are excluded.

Annual wholesale sales rose 19% to $2.76bn, retail sales were up 10% to $1.91bn, and comparable store sales climbed 5.8%.

Excluding the impact of recent acquisitions, full year licensing royalties increased 6%.

At the end of the fourth quarter, the company operated 313 stores, including 80 Ralph Lauren stores, 65 Club Monaco stores, 158 Polo factory stores and 10 Rugby stores.

International licensing partners operate a further 99 Ralph Lauren stores and 49 Club Monaco stores and dedicated shops.

In its outlook for the first quarter of fiscal 2009, the company said it expects consolidated revenues to grow at a low to mid-single digit rate and the consolidated operating margin is expected to be down approximately 300-400 basis points.

For the fiscal year, consolidated revenues are forecast to increase by a low-to-mid single digit percentage, with earnings per share of $3.95-$4.05.