Ralph Lauren beats by $0.60, beats on revs; provides Q1 and FY24 guidance (147.14)
- Reports Q3 (Dec) earnings of $4.17 per share, excluding non-recurring items, $0.60 better than the FactSet Consensus of $3.57; revenues rose 5.6% year/year to $1.93 bln vs the $1.87 bln FactSet Consensus.
- Guidance Details:
- For Fiscal 2024, the Company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis, now centering around 2% compared to 1% to 2% previously. Based on current exchange rates, foreign currency is now expected to have a modest benefit on revenue growth of approximately 10 basis points in Fiscal 2024. The Company continues to expect operating margin for Fiscal 2024 to expand approximately 30 to 50 basis points in constant currency to 12.3% to 12.5%, driven by gross margin expansion. Foreign currency is now expected to have a roughly neutral impact on Fiscal 2024 operating margin. Gross margin is now expected to increase approximately 140 to 180 basis points in constant currency (compared to 120 to 170 basis points previously), with reduced freight costs, favorable channel and geographic mix and continued growth in AUR more than offsetting product cost inflation. Foreign currency is now anticipated to negatively impact gross margins by approximately 20 basis points in Fiscal 2024.
- Gross margin expansion is still expected to more than offset higher operating expenses as a percent of revenue due to channel mix shifts and as the Company invests in long-term strategic growth initiatives, notably digital and key city ecosystem expansion.
- For the fourth quarter, the Company expects revenue growth to be in a range centered around 2% in constant currency to last year. Foreign currency is expected to negatively impact revenue growth by approximately 160 basis points. Operating margin for the fourth quarter is expected to expand approximately 350 to 400 basis points in constant currency, driven largely by gross margin expansion, with about 40 basis points of negative foreign currency impact. Foreign currency is expected to negatively impact gross margin by approximately 50 basis points in the fourth quarter.