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

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

Beat

$2.20 bln

$2.12 bln (14 Analysts)

Q2 Adjusted EPS

Beat

$4.64

$4.26 (14 Analysts)

Q2 EPS

$4.87

Q2 Gross Margin

74.20%

Q2 Operating Margin

16.60%


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.)

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