Polo Ralph Lauren beats by $0.03, reports revs in-line; guides Q3 revs in-line; raises low end of FY14 rev guidance; sees margins at low end of previous guidance; raises quarterly dividend 12.5% (171.19 ) Reports Q2 (Sep) earnings of $2.23 per share, $0.03 better than the Capital IQ Consensus Estimate of $2.20; revenues rose 2.8% year/year to $1.92 bln vs the $1.91 bln consensus.
Co issues in-line guidance for Q3, sees Q3 net revs +8-10% to ~$1.99-2.03 bln vs. $2 bln Capital IQ Consensus, including a 200 basis point net negative impact from foreign currency translation and discontinued businesses. Operating margin for the third quarter of Fiscal 2014 is expected to be ~equal to the comparable prior year period as a lower gross margin is essentially offset by anticipated operating expense leverage despite continued investments to support the Company's strategic growth objectives.
Co issues in-line guidance for FY14, raises FY14 net revs to +5-7% to ~$7.29-7.43 bln (from +4-7%) vs. $7.35 bln Capital IQ Consensus, includes an ~200 basis point net negative impact from foreign currency translation and discontinued businesses. Based on an intensification of investments in the Company's global retail operations in the second half of the year, operating margin for Fiscal 2014 is expected to be at the low end of its outlook, which called for a 25-75 basis point contraction from the prior year's record 16.2%. As a reminder, the anticipated decline in Fiscal 2014 operating margin is due to the integration of certain formerly licensed merchandise categories and geographic regions to directly controlled operations, accelerated investment in the Company's long-term growth initiatives and unfavorable foreign currency effects.
Co also announced that its Board of Directors declared a 12.5% increase in the regular quarterly cash dividend on the Company's Common Stock.
"We successfully transitioned key operations to new technology platforms and made great strides with our global store expansion and e-commerce efforts. Our first half revenues have actualized at the high end of our expectations and profit margins are in line with our plans."