(Reuters) - Ralph Lauren Corp (>> Ralph Lauren Corp) on Wednesday reported disappointing quarterly sales at its own stores, raising concerns that it is expanding too quickly, and the fashion company reiterated its forecast for modest growth this fiscal year.

Shares of Ralph Lauren fell 6.1 percent to $177.89 (£114.70) in midday trading.

Sales at stores open at least a year slipped 1 percent in the first quarter ended June 29, a drop the company blamed on "challenging" trends in customer traffic.

Stripping out the effects of a strong U.S. dollar, comparable sales would have been up, but only by 1 percent, below the 4 percent growth in the previous quarter.

"Retail is a tough business - when you go retail, you make your business more complicated," Morningstar analyst Paul Swinand told Reuters, referring to Ralph Lauren's store expansion.

Analysts expressed concerns about the impact of the store expansions and renovations, as well as investments in e-commerce, on Ralph Lauren's bottom line. The company had about $66 million in capital expenses, including new stores, last quarter.

In a research note, JPMorgan analyst Matthew Boss called Ralph Lauren's efforts "moves for the long term" but said the pressure on profits and slowing retail sales would hurt the company's shares.

Ralph Lauren now operates 396 stores itself, up from 379 last year. It is repositioning itself in China, closing locations that were run by local partners and replacing them with its own in better locations.

Retail now generates 52 percent of sales for Ralph Lauren, compared with 38 percent five years ago. Sales to department stores were long its biggest business.

Wholesale sales rose 6 percent, twice the rate of its retail business, as sales to department stores like Macy's Inc (>> Macy's, Inc.), its single biggest customer, jumped.

The company also is renovating many Club Monaco stores and expanding e-commerce into South Korea, among other projects.

Chief Operating Officer Roger Farah said on the call that those investments would pay off and lift sales growth later this fiscal year.

Ralph Lauren, long a Wall Street darling for its torrid growth, was vulnerable to a selloff at any whiff of slowing business because of how expensive its shares are, Morningstar's Swinand said.

The shares are trading at a price-to-earnings ratio of 20.4, making them more expensive than those of peers like VF Corp (>> VF Corp), Burberry Group Plc (>> Burberry Group plc) and Coach Inc (>> Coach, Inc.).

MODEST GROWTH

Ralph Lauren affirmed its revenue forecast and still expects a rise of 4 percent to 7 percent this fiscal year, a modest pace compared with the double-digit gains of recent years.

The company, whose brands also include Chaps, expects revenue this quarter to be up by a low single-digit percentage rate, hurt in part by the strong U.S. dollar, which lowers the value of foreign sales.

The repositioning in China, as well as the decision last year by J.C. Penney Co Inc (>> J.C. Penney Company, Inc.) to drop Ralph Lauren's "American Living" brand, has hurt sales in the last year.

The company said net revenue, including from licensing, rose 3.8 percent to $1.65 billion in the first quarter. That was in line with Wall Street estimates, according to Thomson Reuters I/B/E/S.

Net income fell to $181 million, or $1.94 per share, from $193 million, or $2.03 per share, a year earlier. That was in line with analysts' projections.

(Reporting by Phil Wahba in New York; Editing by Gerald E. McCormick and Lisa Von Ahn)

By Phil Wahba