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Ralph Lauren (RL) Exceeds Q1 Earnings & Sales Estimates

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Ralph Lauren Corporation (RL - Free Report) , a designer, marketer and distributor of lifestyle products, released first-quarter fiscal 2019 results, wherein adjusted earnings of $1.54 per share came ahead of the Zacks Consensus Estimate of $1.39. Also, earnings rose by 38.7% from the year-ago quarter.

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2019 has been going up in the last 30 days. However, Ralph Lauren’s performance over the trailing four quarters, excluding the quarter under review, remains encouraging with an average beat of 8.4%.

Ralph Lauren Corporation Price, Consensus and EPS Surprise

Revenues: Ralph Lauren’s net revenues dropped 3% to $1,390.6 million but outpaced the Zacks Consensus Estimate of $1,364.6 million. On a currency neutral basis, revenues increased 1%. Revenue grew on the back of strong sales in Asia and Europe.

Outlook: The company issued guidance for second quarter and fiscal 2019. It projects net revenues to decline slightly on a constant currency basis in fiscal 2019. For Fiscal 2019, operating margin is anticipated to increase 40 to 60 basis points in constant currency owing to gross margin expansion. Foreign currency is expected to have minimal impact on revenue growth and operating margin.

For second-quarter fiscal 2019, management envisions net revenues in the band of flat to down slightly on a constant currency basis. Foreign currency is expected to affect revenue growth by approximately 30 to 50 basis points. In the second quarter of fiscal 2019, operating margin is anticipated to grow around 30 basis points in constant currency. Operating margin is expected to be slightly benefited by foreign currency in the second quarter.

In fiscal 2019, effective tax rate is anticipated to be approximately 21% while in the second quarter tax rate is projected at approximately 22%. The company sees capital expenditure of approximately $275 million for Fiscal 2019.

Zacks Rank: Currently, Ralph Lauren carries a Zacks Rank #3 (Hold), which is subject to change following the earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Market Reaction

Ralph Lauren shares were up by 1.94% following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on Ralph Lauren’s earnings report!

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