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Ralph Lauren (RL) to Report Q3 Earnings: What's on the Cards?
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Ralph Lauren Corporation (RL - Free Report) is expected to register top-line growth when it reports third-quarter fiscal 2024 numbers on Feb 8, before the opening bell. The Zacks Consensus Estimate for third-quarter fiscal 2024 revenue is pegged at $1.86 billion, which indicates an increase of 1.6% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $3.49 per share, which suggests growth of 4.2% from the year-ago quarter’s reported figure. The consensus mark for earnings has moved up by a penny in the past seven days.
The apparel and lifestyle products company’s earnings beat the Zacks Consensus Estimate by 9.4% in the last reported quarter. Its earnings outpaced the Zacks Consensus Estimate by 18%, on average, in the trailing four quarters.
Ralph Lauren has been gaining from brand strength, solid demand and expansion across all channels and regions. The company has been focused on enhancing digital capabilities, deepening relations with customers via marketing, expanding international markets and efficiently controlling expenses.
RL’s strategy of product elevation, acquisition of full-priced consumers, favorable channel and geographic mix, and ramping up of its targeting and personalization efforts is likely to have supported AUR growth in the fiscal third quarter.
Ralph Lauren’s premium pricing strategy has been a key contributor to its growth story. The renowned lifestyle apparel company has always managed to maintain higher prices for its clothing. Gains from the improved pricing are likely to get reflected in Ralph Lauren’s top-line results in the to-be-reported quarter.
The company’s focus on expanding digital and omni-channel capabilities via investments in mobile, omni-channel and fulfillment bodes well. Strength across owned and wholesale digital channels globally is likely to have been a key growth driver in the to-be-reported quarter.
Some other notable efforts on the online front are virtual selling appointments, “buy online, pick up in store,” endless aisle product availability, the introduction of additional digital sites in key markets, investments in AI-powered targeting and consumer acquisitions. These factors are likely to have aided the top line in the quarter under review.
On its last reported quarter’s earnings call, management expected third-quarter fiscal 2024 revenue growth of 1-2% on a constant-currency basis. This includes approximately 30 basis points of negative foreign currency impact. The operating margin is predicted to be flat on a constant-currency basis.
The gross margin is anticipated to expand 100-150 bps, which will more than offset higher operating expenses. The gross margin expansion is anticipated to have been driven by lower freight costs and continued AUR growth, partly offset by increased product costs.
Our model predicts a year-over-year adjusted gross margin expansion of 100 bps, while the GAAP gross margin is expected to rise 120 bps in the to-be-reported quarter. SG&A expenses, as a percentage of revenues, are estimated at 50.2%, indicating an increase of 100 bps in the to-be-reported quarter.
We expect the third-quarter fiscal 2024 adjusted operating margin to be flat from the year-ago quarter’s reported number at 16%. The operating margin is likely to have been impacted by elevated SG&A expenses, which should have more than offset growth in the gross margin.
Notably, Ralph Lauren has been witnessing the negative impacts of higher compensation and variable selling expenses, which are anticipated to have partly dented the margins in the fiscal third quarter.
What the Zacks Model Unveils
Our proven model conclusively predicts 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 chances of an earnings beat. 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 #3 and an Earnings ESP of +1.92%.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Planet Fitness (PLNT - Free Report) currently has an Earnings ESP of +2.04% and a Zacks Rank #3. PLNT is likely to register top and bottom-line growth when it reports fourth-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $283.6 million, suggesting 0.8% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Planet Fitness’ fourth-quarter earnings is pegged at 58 cents per share, suggesting 9.4% growth from the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.
Adidas (ADDYY - Free Report) currently has an Earnings ESP of +16.08% and a Zacks Rank #3. ADDYY is likely to register bottom-line growth when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for ADDYY’s fourth-quarter loss is pegged at 92 cents per share, whereas it reported a loss of $1.38 in the year-ago reported quarter. The consensus mark for loss has widened from 80 cents in the past seven days.
The Zacks Consensus Estimate for ADDYY’s quarterly revenues is pegged at $5.12 billion, suggesting a 3.6% decline from the figure reported in the prior-year quarter.
Disney (DIS - Free Report) currently has an Earnings ESP of +0.13% and a Zacks Rank #3. DIS is likely to register top and bottom-line improvement when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly EPS of $1.00 suggests a 1.01% increase from the year-ago quarter’s actual. The consensus mark for DIS’ earnings has moved down by a penny in the past 30 days.
The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $23.5 billion, suggesting a decline of 0.2% from the prior-year quarter’s reported figure.
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Ralph Lauren (RL) to Report Q3 Earnings: What's on the Cards?
Ralph Lauren Corporation (RL - Free Report) is expected to register top-line growth when it reports third-quarter fiscal 2024 numbers on Feb 8, before the opening bell. The Zacks Consensus Estimate for third-quarter fiscal 2024 revenue is pegged at $1.86 billion, which indicates an increase of 1.6% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $3.49 per share, which suggests growth of 4.2% from the year-ago quarter’s reported figure. The consensus mark for earnings has moved up by a penny in the past seven days.
The apparel and lifestyle products company’s earnings beat the Zacks Consensus Estimate by 9.4% in the last reported quarter. Its earnings outpaced the Zacks Consensus Estimate by 18%, 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 has been gaining from brand strength, solid demand and expansion across all channels and regions. The company has been focused on enhancing digital capabilities, deepening relations with customers via marketing, expanding international markets and efficiently controlling expenses.
RL’s strategy of product elevation, acquisition of full-priced consumers, favorable channel and geographic mix, and ramping up of its targeting and personalization efforts is likely to have supported AUR growth in the fiscal third quarter.
Ralph Lauren’s premium pricing strategy has been a key contributor to its growth story. The renowned lifestyle apparel company has always managed to maintain higher prices for its clothing. Gains from the improved pricing are likely to get reflected in Ralph Lauren’s top-line results in the to-be-reported quarter.
The company’s focus on expanding digital and omni-channel capabilities via investments in mobile, omni-channel and fulfillment bodes well. Strength across owned and wholesale digital channels globally is likely to have been a key growth driver in the to-be-reported quarter.
Some other notable efforts on the online front are virtual selling appointments, “buy online, pick up in store,” endless aisle product availability, the introduction of additional digital sites in key markets, investments in AI-powered targeting and consumer acquisitions. These factors are likely to have aided the top line in the quarter under review.
On its last reported quarter’s earnings call, management expected third-quarter fiscal 2024 revenue growth of 1-2% on a constant-currency basis. This includes approximately 30 basis points of negative foreign currency impact. The operating margin is predicted to be flat on a constant-currency basis.
The gross margin is anticipated to expand 100-150 bps, which will more than offset higher operating expenses. The gross margin expansion is anticipated to have been driven by lower freight costs and continued AUR growth, partly offset by increased product costs.
Our model predicts a year-over-year adjusted gross margin expansion of 100 bps, while the GAAP gross margin is expected to rise 120 bps in the to-be-reported quarter. SG&A expenses, as a percentage of revenues, are estimated at 50.2%, indicating an increase of 100 bps in the to-be-reported quarter.
We expect the third-quarter fiscal 2024 adjusted operating margin to be flat from the year-ago quarter’s reported number at 16%. The operating margin is likely to have been impacted by elevated SG&A expenses, which should have more than offset growth in the gross margin.
Notably, Ralph Lauren has been witnessing the negative impacts of higher compensation and variable selling expenses, which are anticipated to have partly dented the margins in the fiscal third quarter.
What the Zacks Model Unveils
Our proven model conclusively predicts 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 chances of an earnings beat. 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 #3 and an Earnings ESP of +1.92%.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Planet Fitness (PLNT - Free Report) currently has an Earnings ESP of +2.04% and a Zacks Rank #3. PLNT is likely to register top and bottom-line growth when it reports fourth-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $283.6 million, suggesting 0.8% growth 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 Planet Fitness’ fourth-quarter earnings is pegged at 58 cents per share, suggesting 9.4% growth from the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.
Adidas (ADDYY - Free Report) currently has an Earnings ESP of +16.08% and a Zacks Rank #3. ADDYY is likely to register bottom-line growth when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for ADDYY’s fourth-quarter loss is pegged at 92 cents per share, whereas it reported a loss of $1.38 in the year-ago reported quarter. The consensus mark for loss has widened from 80 cents in the past seven days.
The Zacks Consensus Estimate for ADDYY’s quarterly revenues is pegged at $5.12 billion, suggesting a 3.6% decline from the figure reported in the prior-year quarter.
Disney (DIS - Free Report) currently has an Earnings ESP of +0.13% and a Zacks Rank #3. DIS is likely to register top and bottom-line improvement when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly EPS of $1.00 suggests a 1.01% increase from the year-ago quarter’s actual. The consensus mark for DIS’ earnings has moved down by a penny in the past 30 days.
The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $23.5 billion, suggesting a decline of 0.2% from the prior-year quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.