Ralph Lauren beats by $0.11, reports revs in-line; guides Q1, FY18 revenue and margins (72.75)
- Reports Q4 (Mar) earnings of $0.89 per share, excluding non-recurring items, $0.11 better than the Capital IQ Consensus of $0.78; revenues fell 16.4% year/year to $1.56 bln vs the $1.56 bln Capital IQ Consensus. FX pressured the fourth quarter revenue growth by ~100 basis points. The fourth quarter revenue decline was in line with the guidance of a mid-teens decline. The decline was driven by our initiatives to improve quality of sales and reduce excess inventory, as well as challenging traffic trends. International revenue in the fourth quarter (consistent with the change in our reportable segments), declined 9% while North America revenue was down 21% to last year. Excluding the impact of foreign currency and on a 13-week to 13-week basis, international revenue was down 2% to last year, with negative currency impact of 300 basis points of the difference.
- On a 13-week to 13-week basis in constant currency, wholesale revenue was down 15% and comps fell 11%.
- Co issues guidance for FY18, sees FY18 revs down 9.5-10.5% to ~$5.95-6.02 bln vs. $6.07 bln Capital IQ Consensus Estimate. For Fiscal 2018, net revenue is expected to decrease 8-9%, excluding the impact of foreign currency. Based on current exchange rates, foreign currency is expected to have ~150 basis points of negative impact on revenue growth in Fiscal 2018. The Company expects operating margin for Fiscal 2018 to be 9.0-10.5%, excluding the impact of foreign currency. Based on current exchange rates, foreign currency is expected to pressure operating margin for Fiscal 2018 by 50-75 basis points.
- In the first quarter of Fiscal 2018, the co expects net revenue to be down low double-digits, excluding the impact of foreign currency. Based on current exchange rates, foreign currency is expected to have ~225 basis points of negative impact on revenue growth in the first quarter of Fiscal 2018. Rev was expected to fall ~12% in Q1. Operating margin for the first quarter of Fiscal 2018 is expected to be about 9.5-10.0%, excluding foreign currency impacts. Foreign currency is estimated to pressure operating margin by ~75 basis points.