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Positive Currency Rates to Aid Ralph Lauren (RL) Q3 Earnings
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We expect Ralph Lauren Corporation (RL - Free Report) to beat expectations when it reports third-quarter fiscal 2018 results on Feb 1. The company posted positive earnings surprise of 4.7% in the last reported quarter.
Moreover, the company has delivered positive earnings surprises consistently in the trailing four quarters, with an average beat of 11.6%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds is whether this designer, marketer and distributor of premium lifestyle products will be able to deliver a positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is pegged at $1.84, reflecting year-over-year decline of 1.1%. We note that earnings estimate for the current quarter has trended up in the last seven days. Moreover, analysts polled by Zacks expect revenues of $1.65 billion, down about 3.9% from the year-ago quarter.
Ralph Lauren has outperformed the industry in the past month, reflecting increased optimism on the stock ahead of the earnings release. The company’s shares have surged 13.8%, compared with industry’s growth of 7.1%.
Factors at Play
Ralph Lauren has a robust surprise trend with positive earnings surprises delivered in 11 straight quarters. Favorable geographic and channel mix shifts along with lower promotions and reduced product costs have been aiding bottom-line performance. Additionally, results in recent quarters have been gaining from foreign currency tailwinds.
The company’s third-quarter and updated fiscal 2018 guidance clearly reflect the gains from recent positive movements in foreign currency rates. The company expects foreign currency to benefit revenue growth by nearly 160-170 basis points (bps) and operating margin by 10-20 bps in the third quarter. Furthermore, it now estimates foreign currency to aid revenue growth by nearly 80 bps, compared with the previous guidance of minimal negative impact. Moreover, foreign currency is now anticipated to have a minimum effect on operating margin, compared with 40-50 bps negative impact predicted earlier.
Looking ahead, management remains confident of Ralph Lauren’s performance, based on its efforts related to global brand reorganization, constant infrastructural investments and e-commerce enhancements. Further, the company’s efforts to evolve product and marketing bode well. All these factors make us optimistic about Ralph Lauren’s upcoming results.
What the Zacks Model Unveils?
Our proven model shows that Ralph Lauren is likely to beat earnings estimates because it has the right combination of two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The company has an Earnings ESP of +2.17% as the Most Accurate estimate of $1.88 is pegged higher than the Zacks Consensus Estimate of $1.84. This along with the company’s Zacks Rank #3 makes us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks with Favorable Combination
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:
Ross Stores Inc. (ROST - Free Report) has an Earnings ESP of +1.91% and a Zacks Rank #2.
The Estée Lauder Companies Inc. (EL - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Positive Currency Rates to Aid Ralph Lauren (RL) Q3 Earnings
We expect Ralph Lauren Corporation (RL - Free Report) to beat expectations when it reports third-quarter fiscal 2018 results on Feb 1. The company posted positive earnings surprise of 4.7% in the last reported quarter.
Moreover, the company has delivered positive earnings surprises consistently in the trailing four quarters, with an average beat of 11.6%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds is whether this designer, marketer and distributor of premium lifestyle products will be able to deliver a positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is pegged at $1.84, reflecting year-over-year decline of 1.1%. We note that earnings estimate for the current quarter has trended up in the last seven days. Moreover, analysts polled by Zacks expect revenues of $1.65 billion, down about 3.9% from the year-ago quarter.
Ralph Lauren Corporation Price and EPS Surprise
Ralph Lauren Corporation Price and EPS Surprise | Ralph Lauren Corporation Quote
Ralph Lauren has outperformed the industry in the past month, reflecting increased optimism on the stock ahead of the earnings release. The company’s shares have surged 13.8%, compared with industry’s growth of 7.1%.
Factors at Play
Ralph Lauren has a robust surprise trend with positive earnings surprises delivered in 11 straight quarters. Favorable geographic and channel mix shifts along with lower promotions and reduced product costs have been aiding bottom-line performance. Additionally, results in recent quarters have been gaining from foreign currency tailwinds.
The company’s third-quarter and updated fiscal 2018 guidance clearly reflect the gains from recent positive movements in foreign currency rates. The company expects foreign currency to benefit revenue growth by nearly 160-170 basis points (bps) and operating margin by 10-20 bps in the third quarter. Furthermore, it now estimates foreign currency to aid revenue growth by nearly 80 bps, compared with the previous guidance of minimal negative impact. Moreover, foreign currency is now anticipated to have a minimum effect on operating margin, compared with 40-50 bps negative impact predicted earlier.
Looking ahead, management remains confident of Ralph Lauren’s performance, based on its efforts related to global brand reorganization, constant infrastructural investments and e-commerce enhancements. Further, the company’s efforts to evolve product and marketing bode well. All these factors make us optimistic about Ralph Lauren’s upcoming results.
What the Zacks Model Unveils?
Our proven model shows that Ralph Lauren is likely to beat earnings estimates because it has the right combination of two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The company has an Earnings ESP of +2.17% as the Most Accurate estimate of $1.88 is pegged higher than the Zacks Consensus Estimate of $1.84. This along with the company’s Zacks Rank #3 makes us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks with Favorable Combination
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:
Tractor Supply Company (TSCO - Free Report) has an Earnings ESP of +0.92% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ross Stores Inc. (ROST - Free Report) has an Earnings ESP of +1.91% and a Zacks Rank #2.
The Estée Lauder Companies Inc. (EL - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>