Polo Ralph Lauren beats by $0.06, reports revs in-line; guides Q4 revs above consensus (raises FY14 rev guidance, lowers margin guidance); adds $500 mln to buyback
Reports Q3 (Dec) earnings of $2.57 per share, $0.06 better than the Capital IQ Consensus Estimate of $2.51; revenues rose 9.2% year/year to $2.02 bln vs the $2.01 bln consensus.
Excluding the net negative impact from foreign currency translation and discontinued businesses, net revenues increased ~11%. Revenue growth was broad-based, with the Americas, Europe and Asia all reporting high single digit increases or better in constant currency.
Wholesale segment sales grew 14% to $840 million in the third quarter of Fiscal 2014. Wholesale revenue growth was primarily a result of strong momentum in core North American merchandise categories, the contribution from the newly transitioned Chaps menswear operations and improved trends in Europe.
Retail sales rose 6% to $1.1 billion in the third quarter, reflecting the incremental contribution from new stores, including newly transitioned operations in Australia/New Zealand, and comparable store sales growth that was partially offset by the net negative impact of foreign currency translation.
Gross profit margin of 58.2% was 110 basis points lower than the comparable prior year period, primarily due to the mix impact from the integration of the Chaps menswear operations and unfavorable foreign currency dynamics that more than offset improved profitability in core operations.
The Company's Board of Directors authorized an additional $500 million stock repurchase program permitting the co to purchase shares of Class A Common Stock, subject to market conditions. This amount is in addition to the $230 million available at the end of the third quarter of Fiscal 2014 as part of a previously authorized stock repurchase program, bringing the Company's total current authorizations to $730 million.
Co issues upside guidance for Q4, sees Q4 net revs +10-12% to ~$1.81-1.84 bln vs. $1.81 bln Capital IQ Consensus; including an ~100 basis point net negative impact from foreign currency translation and discontinued businesses. Operating margin for the fourth quarter of Fiscal 2014 is expected to improve 50-90 basis points from the 11.1% achieved in the comparable prior year period as a lower gross margin is more than offset by anticipated operating expense leverage despite continued investments to support the Company's strategic growth objectives.
The Company is raising its full year, Fiscal 2014 revenue outlook to 7% growth, which is the high end of the previous 5-7% range and includes an ~150-200 basis point net negative impact from foreign currency translation and discontinued businesses. Based on the anticipated fourth quarter margin dynamics, operating margin for Fiscal 2014 is expected to be 110-120 basis points below the prior year's record 16.2%, which compares to the prior outlook of an ~75 basis point contraction.
Excluding the net negative impact from foreign currency translation and discontinued businesses, net revenues increased ~11%. Revenue growth was broad-based, with the Americas, Europe and Asia all reporting high single digit increases or better in constant currency.
Wholesale segment sales grew 14% to $840 million in the third quarter of Fiscal 2014. Wholesale revenue growth was primarily a result of strong momentum in core North American merchandise categories, the contribution from the newly transitioned Chaps menswear operations and improved trends in Europe.
Retail sales rose 6% to $1.1 billion in the third quarter, reflecting the incremental contribution from new stores, including newly transitioned operations in Australia/New Zealand, and comparable store sales growth that was partially offset by the net negative impact of foreign currency translation.
Gross profit margin of 58.2% was 110 basis points lower than the comparable prior year period, primarily due to the mix impact from the integration of the Chaps menswear operations and unfavorable foreign currency dynamics that more than offset improved profitability in core operations.
The Company's Board of Directors authorized an additional $500 million stock repurchase program permitting the co to purchase shares of Class A Common Stock, subject to market conditions. This amount is in addition to the $230 million available at the end of the third quarter of Fiscal 2014 as part of a previously authorized stock repurchase program, bringing the Company's total current authorizations to $730 million.
Co issues upside guidance for Q4, sees Q4 net revs +10-12% to ~$1.81-1.84 bln vs. $1.81 bln Capital IQ Consensus; including an ~100 basis point net negative impact from foreign currency translation and discontinued businesses. Operating margin for the fourth quarter of Fiscal 2014 is expected to improve 50-90 basis points from the 11.1% achieved in the comparable prior year period as a lower gross margin is more than offset by anticipated operating expense leverage despite continued investments to support the Company's strategic growth objectives.
The Company is raising its full year, Fiscal 2014 revenue outlook to 7% growth, which is the high end of the previous 5-7% range and includes an ~150-200 basis point net negative impact from foreign currency translation and discontinued businesses. Based on the anticipated fourth quarter margin dynamics, operating margin for Fiscal 2014 is expected to be 110-120 basis points below the prior year's record 16.2%, which compares to the prior outlook of an ~75 basis point contraction.