Ralph Lauren beats Q2  sales, profit estimates, helped by China demand; hikes outlook

Overview

• US luxury lifestyle brand's Q2 revenue rose 9%, beating analyst expectations

• Adjusted EPS for Q2 was $4.64, beating analyst expectations

• Company raised full-year revenue and operating margin outlook

Outlook

• Ralph Lauren raises full-year constant currency revenue growth outlook to 6%-7% from 5%-6%

• Company now expects full-year operating margin to expand 80-100 basis points in constant currency

• Ralph Lauren expects Q3 constant currency revenue growth of about 3%-4%

Result Drivers

• ASIA GROWTH - Co said Q2 results were led by 28% revenue growth in Asia, with China revenue up more than 35% due to store sales and new distribution

• DIRECT-TO-CONSUMER SALES - Co said global comparable store sales rose 10%, with balanced growth across digital and physical channels and 9% AUR growth

• GROSS MARGIN DRIVERS - Co attributed adjusted gross margin expansion to higher average unit retail, favorable geographic mix, and lower product costs

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 16 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories peer group is "buy"

• Wall Street's median 12-month price target for Ralph Lauren Corporation is $456.00, about 10.7% above its November 4 closing price of $412.06

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 20 three months ago

Reuters Recommended Reads

• Nov 5 - Tapestry Q1 revenue and adjusted EPS beat estimates, outlook raised

• Nov 5 - Tapestry lifts outlook as young shoppers snap up Coach bags, shares jump

• Nov 2 - Estee Lauder cuts promotions as luxury fragrances help lift outlook

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)