Ralph Lauren Earnings Edge Past Estimates

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Ralph Lauren Earnings Edge Past Estimates
Credit: © Reuters.

NEW YORK - Ralph Lauren Corporation (NYSE: RL ) announced its fourth-quarter earnings, slightly surpassing analyst expectations with an adjusted EPS of $1.71, compared to the estimated $1.67.

Revenue also exceeded forecasts, reaching $1.6 billion against the consensus estimate of $1.56 billion. Despite the positive earnings results, the company's shares fell by 2%.

The revenue figure marks an improvement from the same quarter last year, indicating the company's resilience amid challenging market conditions. Ralph Lauren's performance this quarter reflects a strategic approach to navigating the complex global economic landscape, including inflationary pressures and foreign currency volatility.

Looking ahead, Ralph Lauren provided guidance for Fiscal 2025, anticipating low-single-digit revenue growth on a constant currency basis, centering around 2% to 3%. However, due to the expected negative foreign currency impact of approximately 90 basis points, actual revenue growth might be slightly lower.

For the first quarter of Fiscal 2025, the company forecasts revenues to be up slightly on a constant currency basis but down slightly on a reported basis, including a negative foreign currency impact of around 160 basis points.

The company's operating margin for Fiscal 2025 is projected to expand by 100 to 120 basis points in constant currency, driven by an increase of 50 to 100 basis points in gross margin. This expansion is anticipated despite the incremental product costs from materials and labor, as well as freight costs related to Red Sea disruptions.

For the first quarter, operating margin is expected to grow by 60 to 80 basis points in constant currency, with gross margin expansion of 140 to 180 basis points, driven by lower cotton costs and continued average unit retail (AUR) growth.

The company's capital expenditures for Fiscal 2025 are planned to be in the range of $300 million to $325 million. The full-year tax rate is expected to be between 23% and 24%, with the first quarter's tax rate projected at about 24% to 25%.

In a statement, the CEO commented on the company's ability to deliver strong results and expressed confidence in their strategy to drive sustainable long-term growth and value creation.

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