Ralph Lauren
stock rose Wednesday after the company beat Wall Street’s expectations for the second-quarter and reiterated guidance for fiscal 2024.
Ralph Lauren (ticker: RL) posted adjusted earnings of $2.10 a share, topping estimates of $1.93 a share, according to FactSet. Revenue increased 3% from the same time last year to $1.63 billion, roughly in-line with projections.
Global same-store sales rose 6% in the quarter, well ahead of expectations for a 0.9 percentage point increase.
The company reiterated its outlook for the rest of fiscal 2024. It continues to expect revenue to increase between 1% to 2% on a constant currency basis compared with last year.
“Being able to maintain the guidance we gave last May I think shows the durability of our strategy through a pretty volatile operating environment,” said Jane Nielsen, Ralph Lauren’s chief financial officer, on a call with Barron’s. “We are more committed than ever to our strategy, that doesn’t mean we’re not nuanced in the tactics and being pragmatic about the environment.”
The outlook reflects increased caution around demand for wholesale the company said. Wholesale revenue in North America fell 7% in the second quarter.
“We do see some challenges and have some caution on the channel overall,” Nielsen said. But not all wholesale is created equally, she added. The company’s brands sold at wholesalers that cater to higher income consumers performed better than those that served a more aspirational shopper, she added.
Third-quarter revenue will also be up 1% to 2% from the same time last year. Analysts were predicting revenue would rise by 3%.
Ralph Lauren slightly tweaked its gross margin outlook for the year, thanks in part to lower freight costs. Margins will grow between 1.2 percentage points to 1.7 percentage points, up from a prior outlook of 1 percentage point.
Shares of Ralph Lauren ticked up 3% to $116.25 Wednesday morning. The stock is up 10% this year. The
S&P 500
was down 0.1%.
Write to Sabrina Escobar at [email protected]
Read the full article here