Polo Ralph Lauren Corporation has reported a 40% jump in second quarter profit, as strong sales in Europe helped offset lower demand in its domestic market.

The US fashion company said quarterly net income rose to US$161m, from $115m in the prior year period, with its growth also helped by a lower effective tax rate.

Profit for the first six months increased 25.5% to $256m from $204m, with sales up 7% to $2.54bn.

"Our strong performance for the first six months of the year confirms that we are on the right strategic course," said Ralph Lauren, chairman and chief executive officer.

"While global uncertainty is a reality that we will likely be living with for some time, the desirability of our brand and products continues to expand worldwide."

Wholesale sales increased 10% to $846m in the quarter, with shipments of new products and higher European sales offseting lower domestic shipments of men's, women's and children's wear products.

For the first six months of the fiscal year, wholesale sales increased 6% to $1.42bn.

The company's retail sales were up 12% to $531m. Comparable store sales rose 5.1%, with an increase of 0.3% at Ralph Lauren stores, 8.2% at factory stores and a 3.7% decline at Club Monaco stores.

Sales at the company's RalphLauren.com e-commerce site increased 31%, driven by double-digit gains in all major categories.

Meanwhile, the company said that licensing royalties declined 2% to $52m compared to $53m last year.

Royalties from new product licenses and domestic Polo men's underwear sales were offset by a decline in Japanese product licensing revenues after the company took direct control of its business there.

Operating expenses increased 8% in the second quarter to $545m and 9% for the first half.

During the second quarter, the company opened 12 stores and closed one store, taking its total to 328 stores.

Polo Ralph Lauren now expects a low single digit increase in net revenues during fiscal 2009, with is down on earlier guidance for low-to-mid single digit net revenue growth.

The company's estimate for diluted earnings per share for the full year remains at $4.00-$4.10.