Ralph Lauren Wins Big on Earnings

Ralph Lauren Corp. (NYSE: RL) reported its most recent quarterly earnings before the markets opened on Tuesday. The company posted $1.11 in earnings per share (EPS) and $1.35 billion in revenue, compared with consensus estimates that called for $0.94 in EPS and revenue of $1.34 billion. In the fiscal first-quarter of last year, it posted EPS of $1.06 and $1.55 billion in revenue.

As for the company’s business segments, Ralph Lauren reported as follows:

• North America revenue in the first quarter decreased 17% to $710 million. The decline was due to lower sales in both the retail and wholesale channels.
• Europe revenue in the first quarter decreased 14% to $323 million on a reported basis and 10% in constant currency. The decline was primarily driven by shifts in timing of shipments in wholesale
• Asia revenue in the first quarter decreased 1% on a reported basis to $209 million and increased 1% in constant currency. Comparable store sales increased 2% in constant currency driven by higher traffic.

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In terms of the outlook for the fiscal second quarter, the company expects to see net revenue down 9% to 10% and operating margin is expected to be up 40 to 60 basis points, excluding foreign currency impacts.

Consensus estimates call for $1.54 in EPS and $1.6 billion in revenue for the current quarter.

Ralph Lauren cash, cash equivalents and short-term investments totaled $1.57 billion at the end of the quarter, up from with $1.08 billion in the same period last year.

Patrice Louvet, president and CEO, commented:

While we are addressing challenges in our business, we have significant opportunity ahead and we’re moving forward with urgency. Ralph and I are focused on actively evolving the brand expression and consumer experience so we can ultimately renew growth and get back to leading. We are continuing to build a strong foundation for future growth, as evidenced by our progress this quarter on the key elements of the Way Forward plan.

Shares of Ralph Lauren trade up 8.2% to $84.59 early Tuesday. The consensus analyst price target is $75.00 and the 52-week range is $66.06 to $114.00.

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