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Factors Likely to Influence Ralph Lauren's (RL) Q1 Earnings
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Ralph Lauren Corporation (RL - Free Report) is expected to register top-line growth when it reports first-quarter fiscal 2023 numbers on Aug 9, before the opening bell. The Zacks Consensus Estimate for first-quarter fiscal 2023 revenues is pegged at $1.41 billion, which indicates growth of 2.7% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $1.72 per share, which suggests a decline of 24.9% from the year-ago quarter’s reported figure. The consensus mark for earnings has moved down by a penny in the past 30 days.
The apparel and lifestyle products company’s earnings beat the Zacks Consensus Estimate by 63.3% in the last reported quarter. Its earnings outpaced the Zacks Consensus Estimate by 71.9%, on average, in the trailing four quarters.
Ralph Lauren is expected to have witnessed elevated marketing expenses in first-quarter fiscal 2023 to support various initiatives, digital expansion into new markets and categories, and consumer acquisition. Driven by confidence in its demand-creation activities, Ralph Lauren anticipated marketing expenses to support new website, mobile apps, consumer acquisition, and key brand moments through the rest of fiscal 2023.
Ralph Lauren is expected to have continued to witness significant cost inflation due to the ongoing supply-chain disruptions and higher logistics and raw material costs. These are likely to have weighed on the company’s margins in the to-be-reported quarter. Also, the company is likely to have been impacted by the highly volatile and inflationary input cost environment.
On the last reported quarter’s earnings call, management issued the first-quarter fiscal 2023 guidance based on the current supply-chain condition, inflationary pressures, the war in Ukraine, COVID-19 variants and other COVID-related disruptions. It expected the ongoing uncertainty to continue, impacting market recovery. The company has also taken into account the potential for a further resurgence of the coronavirus outbreak and the possibility of global supply-chain disruptions.
For the first quarter of fiscal 2023, the company expects year-over-year revenue growth of 8% at cc. This includes a 480-500 bps impact of unfavorable currency. The view also considers government-mandated lockdowns and other COVID-related restrictions, particularly in China.
The company anticipates an operating margin of 13.5% at cc, which includes the negative impacts of higher freight and marketing expenses. The operating margin is expected to be hurt by 130 bps of unfavorable currency. The gross margin is predicted to decline year over year at cc due to rising freight and product costs, offsetting continued AUR growth. Unfavorable currency impacts of 100 bps are likely to have dented the gross margin.
However, Ralph Lauren’s fiscal first-quarter performance is expected to have benefited from the momentum across all regions, along with digital growth. The company is likely to have retained its strong performance on consistent brand-elevation efforts and robust full-priced selling trends, which have been aiding average unit retail (AUR) growth. Robust AUR growth, along with improved pricing and promotions, and a better product mix, have been boosting the gross margin.
RL’s focus on expanding digital and omni-channel capabilities through investments in the mobile app, omni-channel and fulfillment bodes well. The investments have been accretive to the company’s top line and margins in the past few quarters. The digital business is likely to have continued to be a key growth driver, with accelerated digital sales across all regions in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Ralph Lauren this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ralph Lauren has a Zacks Rank #4 (Sell) and an Earnings ESP of -1.26%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this reporting cycle.
NeoGames currently has an Earnings ESP of +12.50% and a Zacks Rank #2. NGMS is anticipated to register top and bottom-line growth when it reports second-quarter 2022 results. The Zacks Consensus Estimate for NGMS' quarterly revenues is pegged at $13 million, indicating an improvement of 1.2% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for NeoGames’ bottom line has been unchanged in the past 30 days at 13 cents per share. The metric suggests growth of 30% from the year-ago quarter’s reported figure. NGMS has delivered a negative earnings surprise of 45.9%, on average, in the trailing four quarters.
Hyatt Hotels (H - Free Report) has an Earnings ESP of +216.67% and a Zacks Rank of 3 at present. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2022 results. The Zacks Consensus Estimate for the quarterly loss per share is pegged at 1 cent, whereas it reported a loss of $1.15 in the year-ago quarter. The Zacks Consensus Estimate for loss has been moved down by 3 cents per share in the past 30 days.
Hyatt Hotels’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.36 billion, which suggests a rise of 105.6% from the figure reported in the prior-year quarter. H has delivered a negative earnings surprise of 383.5%, on average, in the trailing four quarters.
Dolby Laboratories (DLB - Free Report) currently has an Earnings ESP of +5.00% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports third-quarter fiscal 2022 results. The Zacks Consensus Estimate for DLB’s quarterly revenues is pegged at $295.2 million, which suggests a rise of 2.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Dolby Laboratories' quarterly earnings has moved down 4.8% in the past 30 days to 60 cents per share, suggesting a 15.5% decline from the year-ago quarter’s reported number. DLB has delivered an earnings beat of 14.7%, on average, in the trailing four quarters.
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Factors Likely to Influence Ralph Lauren's (RL) Q1 Earnings
Ralph Lauren Corporation (RL - Free Report) is expected to register top-line growth when it reports first-quarter fiscal 2023 numbers on Aug 9, before the opening bell. The Zacks Consensus Estimate for first-quarter fiscal 2023 revenues is pegged at $1.41 billion, which indicates growth of 2.7% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $1.72 per share, which suggests a decline of 24.9% from the year-ago quarter’s reported figure. The consensus mark for earnings has moved down by a penny in the past 30 days.
The apparel and lifestyle products company’s earnings beat the Zacks Consensus Estimate by 63.3% in the last reported quarter. Its earnings outpaced the Zacks Consensus Estimate by 71.9%, on average, in the trailing four quarters.
Ralph Lauren Corporation Price and EPS Surprise
Ralph Lauren Corporation price-eps-surprise | Ralph Lauren Corporation Quote
Factors to Note
Ralph Lauren is expected to have witnessed elevated marketing expenses in first-quarter fiscal 2023 to support various initiatives, digital expansion into new markets and categories, and consumer acquisition. Driven by confidence in its demand-creation activities, Ralph Lauren anticipated marketing expenses to support new website, mobile apps, consumer acquisition, and key brand moments through the rest of fiscal 2023.
Ralph Lauren is expected to have continued to witness significant cost inflation due to the ongoing supply-chain disruptions and higher logistics and raw material costs. These are likely to have weighed on the company’s margins in the to-be-reported quarter. Also, the company is likely to have been impacted by the highly volatile and inflationary input cost environment.
On the last reported quarter’s earnings call, management issued the first-quarter fiscal 2023 guidance based on the current supply-chain condition, inflationary pressures, the war in Ukraine, COVID-19 variants and other COVID-related disruptions. It expected the ongoing uncertainty to continue, impacting market recovery. The company has also taken into account the potential for a further resurgence of the coronavirus outbreak and the possibility of global supply-chain disruptions.
For the first quarter of fiscal 2023, the company expects year-over-year revenue growth of 8% at cc. This includes a 480-500 bps impact of unfavorable currency. The view also considers government-mandated lockdowns and other COVID-related restrictions, particularly in China.
The company anticipates an operating margin of 13.5% at cc, which includes the negative impacts of higher freight and marketing expenses. The operating margin is expected to be hurt by 130 bps of unfavorable currency. The gross margin is predicted to decline year over year at cc due to rising freight and product costs, offsetting continued AUR growth. Unfavorable currency impacts of 100 bps are likely to have dented the gross margin.
However, Ralph Lauren’s fiscal first-quarter performance is expected to have benefited from the momentum across all regions, along with digital growth. The company is likely to have retained its strong performance on consistent brand-elevation efforts and robust full-priced selling trends, which have been aiding average unit retail (AUR) growth. Robust AUR growth, along with improved pricing and promotions, and a better product mix, have been boosting the gross margin.
RL’s focus on expanding digital and omni-channel capabilities through investments in the mobile app, omni-channel and fulfillment bodes well. The investments have been accretive to the company’s top line and margins in the past few quarters. The digital business is likely to have continued to be a key growth driver, with accelerated digital sales across all regions in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Ralph Lauren this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ralph Lauren has a Zacks Rank #4 (Sell) and an Earnings ESP of -1.26%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this reporting cycle.
NeoGames currently has an Earnings ESP of +12.50% and a Zacks Rank #2. NGMS is anticipated to register top and bottom-line growth when it reports second-quarter 2022 results. The Zacks Consensus Estimate for NGMS' quarterly revenues is pegged at $13 million, indicating an improvement of 1.2% from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NeoGames’ bottom line has been unchanged in the past 30 days at 13 cents per share. The metric suggests growth of 30% from the year-ago quarter’s reported figure. NGMS has delivered a negative earnings surprise of 45.9%, on average, in the trailing four quarters.
Hyatt Hotels (H - Free Report) has an Earnings ESP of +216.67% and a Zacks Rank of 3 at present. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2022 results. The Zacks Consensus Estimate for the quarterly loss per share is pegged at 1 cent, whereas it reported a loss of $1.15 in the year-ago quarter. The Zacks Consensus Estimate for loss has been moved down by 3 cents per share in the past 30 days.
Hyatt Hotels’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.36 billion, which suggests a rise of 105.6% from the figure reported in the prior-year quarter. H has delivered a negative earnings surprise of 383.5%, on average, in the trailing four quarters.
Dolby Laboratories (DLB - Free Report) currently has an Earnings ESP of +5.00% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports third-quarter fiscal 2022 results. The Zacks Consensus Estimate for DLB’s quarterly revenues is pegged at $295.2 million, which suggests a rise of 2.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Dolby Laboratories' quarterly earnings has moved down 4.8% in the past 30 days to 60 cents per share, suggesting a 15.5% decline from the year-ago quarter’s reported number. DLB has delivered an earnings beat of 14.7%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.